10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 30, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 0-02287

SYMMETRICOM, INC.

(Exact name of registrant as specified in our charter)

Delaware	No. 95-1906306
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

2300 Orchard Parkway, San Jose, California 95131-1017

(Address of principal executive offices)

Registrant’s telephone number: (408) 433-0910

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date:

Class	Outstanding as of January 27, 2013
Common Stock	40,796,571

SYMMETRICOM, INC.

FORM 10-Q

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets—December 30, 2012 and July 1, 2012		3
	Condensed Consolidated Statements of Operations—Three and six months ended December 30, 2012 and January 1, 2012		4
	Consolidated Statements of Comprehensive Income (Loss)—Three and six months ended December 30, 2012 and January 1, 2012		5
	Condensed Consolidated Statements of Cash Flows—Six months ended December 30, 2012 and January  1, 2012		6
	Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		25
Item 4.	Controls and Procedures		25
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		26
Item 1A.	Risk Factors		26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 3.	Defaults Upon Senior Securities		26
Item 4.	Mine Safety Disclosures		26
Item 5.	Other Information		26
Item 6.	Exhibits		27
SIGNATURES			28

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)

(Unaudited)

	December 30, 2012			July 1, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	25,966		$	27,659
Short-term investments		44,789			39,280
Accounts receivable, net of allowance for doubtful accounts of $658 and $108		35,789			45,952
Inventories		48,176			47,618
Prepaids and other current assets		19,290			16,943
Total current assets		174,010			177,452
Property, plant and equipment, net		23,075			22,702
Intangible assets, net		3,364			3,458
Deferred taxes and other assets		28,200			27,413
Total assets	$	228,649		$	231,025
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,715		$	9,300
Accrued compensation		12,606			14,574
Accrued warranty		1,492			1,722
Other accrued liabilities		10,409			11,841
Total current liabilities		37,222			37,437
Long-term obligations		5,239			5,472
Deferred income taxes		334			334
Total liabilities		42,795			43,243
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 500 shares authorized, none issued		—			—
Common stock, $0.0001 par value; 70,000 shares authorized, 52,177 shares issued and 40,685 outstanding at December 30, 2012; 51,500 shares issued and 40,952 outstanding at July 1, 2012		193,408			193,478
Accumulated other comprehensive loss		(112	)		(232	)
Accumulated deficit		(7,442	)		(5,464	)
Total stockholders’ equity		185,854			187,782
Total liabilities and stockholders’ equity	$	228,649		$	231,025

See notes to the condensed consolidated financial statements.

3

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Six Months Ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
Net revenue	$	49,151		$	58,294		$	105,542		$	114,672
Cost of sales:
Cost of products and services		27,861			32,225			59,761			62,055
Acquisition-related costs		248			185			482			371
Restructuring charges		41			674			(4	)		1,091
Total cost of sales		28,150			33,084			60,239			63,517
Gross profit		21,001			25,210			45,303			51,155
Operating expenses:
Research and development		7,805			6,548			16,118			13,446
Selling, general and administrative		14,778			14,864			31,005			29,674
Amortization of intangible assets		86			52			172			104
Restructuring charges		1,146			103			1,201			199
Total operating expenses		23,815			21,567			48,496			43,423
Operating income (loss)		(2,814	)		3,643			(3,193	)		7,732
Interest income, net of amortization (accretion) of premium (discount) on investments		178			(296	)		142			(230	)
Income (loss) before taxes		(2,636	)		3,347			(3,051	)		7,502
Income tax provision (benefit)		(861	)		902			(1,073	)		2,308
Net income (loss)	$	(1,775	)	$	2,445		$	(1,978	)	$	5,194
Earnings (loss) per share:
Basic	$	(0.04	)	$	0.06		$	(0.05	)	$	0.12
Diluted	$	(0.04	)	$	0.06		$	(0.05	)	$	0.12
Shares used in computing earnings (loss) per share:
Weighted average shares outstanding—basic		40,356			42,292			40,432			42,490
Weighted average shares outstanding—diluted		40,356			42,762			40,432			42,989

See notes to the condensed consolidated financial statements.

4

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Three Months Ended					Six Months Ended
	December 30, 2012			January 1, 2012		December 30, 2012			January 1, 2012
Net income (loss)	$	(1,775	)	$	2,445	$	(1,978	)	$	5,194
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments		19			11		118			(236	)
Unrealized gain (loss) on investments		(18	)		4		2			(31	)
Other comprehensive income (loss)		1			15		120			(267	)
Total comprehensive income (loss)	$	(1,774	)	$	2,460	$	(1,858	)	$	4,927

See notes to the condensed consolidated financial statements.

5

SYMMETRICOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended
	December 30, 2012			January 1, 2012
Cash flows from operating activities:
Net income (loss)	$	(1,978	)	$	5,194
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		3,206			2,854
Deferred income taxes		(1,418	)		2,048
Loss on disposal of fixed assets		330			139
Stock-based compensation		3,459			2,843
Allowance for doubtful accounts		550			10
Provision for excess and obsolete inventory		1,446			2,012
Changes in assets and liabilities:
Accounts receivable		9,613			3,962
Inventories		(2,004	)		(1,859	)
Prepaids and other assets		(1,227	)		(3,260	)
Accounts payable		2,361			(7,601	)
Accrued compensation		(1,968	)		(811	)
Other accrued liabilities		(2,247	)		(3,229	)
Net cash provided by operating activities		10,123			2,302
Cash flows from investing activities:
Purchases of short-term investments		(22,546	)		(15,576	)
Maturities/sale of short-term investments		16,500			22,728
Purchases of property, plant and equipment		(2,259	)		(1,922	)
Payment to acquire business		(100	)		—
Remaining cash proceeds from sale of discontinued operations		—			210
Net cash provided by (used in) investing activities		(8,405	)		5,440
Cash flows from financing activities:
Proceeds from issuance of common stock		2,111			1,072
Repurchase of common stock		(5,640	)		(6,102	)
Net cash used in financing activities		(3,529	)		(5,030	)
Effect of exchange rate changes on cash		118			(236	)
Net increase (decrease) in cash and cash equivalents		(1,693	)		2,476
Cash and cash equivalents at beginning of period		27,659			20,318
Cash and cash equivalents at end of period	$	25,966		$	22,794
Non-cash investing and financing activities:
Unrealized gain (loss) on investments, net	$	2		$	(31	)
Property, plant and equipment purchases included in accounts payable		1,239			133
Purchase consideration for acquired business		350			—
Cash payments for:
Income taxes		1,417			264

See notes to the condensed consolidated financial statements.

6

SYMMETRICOM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation and Recently Issued Accounting Pronouncements

The condensed consolidated financial statements of Symmetricom, Inc. (“Symmetricom,” “we,” “us,” the “Company,” or “our”) included herein are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of the management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. In presenting the financial statements in accordance with accounting principles generally accepted in the United States (US GAAP), management makes certain estimates and assumptions that impact the amounts reported and related disclosures. Estimates, by their nature, are judgments based upon available information. Accordingly, actual results could differ from those estimates.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Symmetricom’s Annual Report on Form 10-K for the fiscal year ended July 1, 2012. The results of operations for the three and six months ended December 30, 2012 are not necessarily indicative of the results to be anticipated for the entire fiscal year ending June 30, 2013.

The condensed consolidated balance sheet as of July 1, 2012 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes required by US GAAP for complete financial statements.

Fiscal Quarter

Our fiscal quarter is 13 weeks ending on the Sunday closest to the end of the calendar quarter.

Note 2. Financial Instruments

We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value is observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

• Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

• Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

• Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

7

Financial assets measured at fair value on a recurring basis consisted of the following types of instruments as of December 30, 2012 and July 1, 2012:

	Fair Value as of December 30, 2012		Quoted prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Money market funds	$	10,076	$	10,076	$	—	$	—
Short-term investments:
Corporate debt securities		33,646		—		33,646		—
Government sponsored enterprise debt securities		8,259		—		8,259		—
Mutual funds		2,884		2,884		—		—
Total short-term investments		44,789		2,884		41,905		—
Total financial assets	$	54,865	$	12,960	$	41,905	$	—
Liabilities:
Contingent consideration	$	650	$	—	$	—	$	650
Total financial liabilities	$	650	$	—	$	—	$	650

	Fair Value as of July 1, 2012		Quoted prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Money market funds	$	8,650	$	8,650	$	—	$	—
Short-term investments:
Corporate debt securities		23,703		—		23,703		—
Government sponsored enterprise debt securities		12,515		—		12,515		—
Mutual funds		3,062		3,062		—		—
Total short-term investments		39,280		3,062		36,218		—
Total financial assets	$	47,930	$	11,712	$	36,218	$	—
Liabilities:
Contingent consideration	$	540	$	—	$	—	$	540
Total financial liabilities	$	540	$	—	$	—	$	540

Level 1 and 2 financial assets:

The fair values of our money market funds and mutual funds were derived from quoted market prices as active markets for these instruments exist. The fair values of corporate debt securities and government sponsored enterprise debt securities were derived from non-binding market consensus prices that are corroborated by observable market data.

8

The investments in mutual funds are held in a Rabbi trust to support the terms of our deferred compensation plan.

The following table summarizes available-for-sale and trading securities recorded as cash and cash equivalents or short-term investments:

	Amortized Cost		Gross  Unrealized  Gains (Losses)		Fair Value
December 30, 2012	(In thousands)
Money market funds	$	10,076	$	—	$	10,076
Corporate debt securities		33,642		4		33,646
Government sponsored enterprise debt securities		8,258		1		8,259
Mutual funds		2,884		—		2,884
Total financial assets	$	54,860	$	5	$	54,865

	Amortized Cost		Gross  Unrealized  Gains (Losses)			Fair Value
July 1, 2012	(In thousands)
Money market funds	$	8,650	$	—		$	8,650
Corporate debt securities		23,705		(2	)		23,703
Government sponsored enterprise debt securities		12,513		2			12,515
Mutual funds		3,062		—			3,062
Total financial assets	$	47,930	$	—		$	47,930

The following table summarizes the contractual maturities of fixed income securities (corporate debt securities and government sponsored enterprise debt securities) recorded as short-term investments as of December 30, 2012:

	Amortized Cost		Fair Value
	(In thousands)
Less than 1 year	$	22,373	$	22,385
Due in 1 to 3 years		19,527		19,520
Total	$	41,900	$	41,905

Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.

Level 3 financial liability:

The following table reconciles the beginning and ending balances for Level 3 liabilities for the first six months of 2013 (in thousands):

	Contingent consideration
Balance as of July 1, 2012	$	540
Add: Adjustment to present value of contingent consideration		110
Balance as of December 30, 2012	$	650

9

Contingent consideration on acquired business is measured at fair value on a recurring basis using Level 3 inputs as defined in the fair value hierarchy. The following table presents certain information about the significant unobservable inputs used in the fair value measurement for the contingent consideration measured at fair value on a recurring basis using significant unobservable inputs:

Description	Valuation Techniques	Significant Unobservable Inputs
Liabilities: Contingent consideration	Present value of a Probability Weighted Earnout model using an appropriate discount rate.	Estimate of future revenue associated with acquired technology. Revenue of $4.9 million over a range of 2.5 years to 3 years.

An increase in the revenue growth percentage could result in a significantly higher estimated fair value of the contingent consideration liability. Alternatively, a decrease in the revenue growth percentage could result in a significantly lower estimated fair value of contingent consideration liability.

The fair value of contingent consideration was derived from a probability weighted earn-out model of future contingent payments. The cash payments, if any, are expected to be made quarterly, based upon revenue generated from the acquired product line, starting in fiscal 2013. No payments were made in the first six months of fiscal 2013. The valuation of this liability is estimated based upon a collaborative effort of the Company’s marketing and finance departments. These future contingent payments are calculated based on estimates of future revenue attributable to the acquired technology (Note 12). To obtain a current valuation of these projected cash flows, an expected present value technique is applied using an appropriate discount rate. The cash flow projections and discount rates will be reviewed quarterly and updated as and when necessary. Potential valuation adjustments will be made as future revenue projections are updated which affect the calculation of the related contingent consideration payments. These adjustments will be recorded in the income statement.

Note 3. Inventories

Components of inventories were as follows:

	December 30, 2012		July 1, 2012
	(In thousands)
Raw materials	$	19,950	$	21,003
Work-in-process		9,794		10,440
Finished goods		18,432		16,175
Inventories	$	48,176	$	47,618

Note 4. Intangible Assets

Intangible assets consist of:

	Gross Carrying Amount		Accumulated Amortization			Net Intangible Assets
	(in thousands)
Purchased technology	$	26,420	$	(24,215	)	$	2,205
Customer lists and trademarks		7,303		(6,144	)		1,159
Total as of December 30, 2012	$	33,723	$	(30,359	)	$	3,364
Purchased technology	$	25,970	$	(23,845	)	$	2,125
Customer lists and trademarks		7,303		(5,970	)		1,333
Total as of July 1, 2012	$	33,273	$	(29,815	)	$	3,458

10

The estimated future amortization expense by fiscal year is as follows:

Fiscal year:	(in thousands)
2013 (Remaining 6 months)	$	567
2014		1,099
2015		726
2016		551
2017		244
Thereafter		177
Total amortization	$	3,364

Intangible asset amortization expense for the second quarter of fiscal 2013 and 2012 was $0.3 million and $0.2 million, respectively. Intangible asset amortization expense for the first six months of fiscal 2013 and 2012 was $0.6 million and $0.5 million, respectively.

Note 5. Warranty

Changes in our accrued warranty liability were as follows:

	Three Months Ended						Six Months Ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
	(In thousands)						(In thousands)
Beginning balance	$	1,779		$	1,477		$	1,722		$	1,601
Provision for warranty		511			725			1,242			1,230
Accruals related to change in estimate		(214	)		251			(97	)		343
Less: Actual warranty costs		(584	)		(618	)		(1,375	)		(1,339	)
Ending balance	$	1,492		$	1,835		$	1,492		$	1,835

11

Note 6. Long-term Obligations

Long-term obligations consist of:

	December 30, 2012		July 1, 2012
	(In thousands)
Long-term obligations:
Deferred revenue	$	2,029	$	2,254
Lease loss accrual, net		963		1,240
Rent accrual		1,043		1,102
Post-retirement benefits		193		173
Income tax		216		216
Consideration for acquired businesses		795		487
Total	$	5,239	$	5,472

Note 7. Stockholders’ Equity

Stock Options and Awards Activity

Stock award activity for the six months ended December 30, 2012 is as follows:

	Shares Available For Grant			Non Performance-based Options Outstanding					Restricted Stock Outstanding
				Number of Shares			Weighted Average Exercise Price Per Share		Number of Shares			Weighted Average Grant-Date Fair Value
	(In thousands, except per share amounts)
Balances at July 1, 2012		2,889			7,316		$	5.54		261		$	5.68
Granted—options		(1,280	)		1,280			6.14		—			—
Granted—restricted shares		(406	)		—			—		203			6.19
Exercised		—			(316	)		4.88		—			—
Vested		—			—			—		(107	)		5.94
Cancelled		140			(140	)		5.85		—			—
Balances at December 30, 2012		1,343			8,140		$	5.65		357		$	5.89

Stock options outstanding, vested and expected to vest, and exercisable as of December 30, 2012 were as follows:

Options	Number of Shares		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Aggregate Intrinsic Value
	(In thousands)		(In years)				(In thousands)
Outstanding		8,140		4.58	$	5.65	$	3,179
Vested and expected to vest		7,852		4.53	$	5.65	$	3,117
Exercisable		4,208		3.50	$	5.64	$	2,157

12

The aggregate intrinsic value in the preceding table represents the total pre-tax value of stock options outstanding as of December 30, 2012, based on our common stock closing price of $5.66 on December 28, 2012, which would have been received by the option holders had all option holders exercised their options as of that date.

The total intrinsic value of options exercised during the second quarter of fiscal 2013 and 2012 was approximately $141,000 and $54,000, respectively.

For the second quarter of fiscal 2013 and 2012, the weighted-average estimated fair value of options granted was $2.92 and $2.43 per share, respectively. For the six months ended December 30, 2012 and January 1, 2012, the weighted-average estimated fair value of options granted was $2.92 and $2.43 per share, respectively. Our calculations were made using the Black-Scholes option-pricing model. The fair value of Symmetricom stock-based awards to employees was estimated assuming no expected dividend and the weighted-average assumptions for the three and six months ended December 30, 2012 and January 1, 2012 as follows:

	Three months ended						Six months ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
Expected life (in years)		4.9			4.9			4.9			5.0
Risk-free interest rate		0.5	%		0.6	%		0.5	%		0.7	%
Volatility		56.8	%		56.8	%		56.8	%		56.2	%

We calculated the stock-based compensation expense in the second quarter of fiscal 2013 and 2012, using an estimated annual forfeiture rate of 5.6% and 7.2%, respectively. At December 30, 2012, the total cumulative compensation cost related to unvested stock-based awards granted to employees, directors and consultants under the Company’s stock option plans, but not yet recognized, was approximately $6.6 million, net of estimated forfeitures of $1.1 million. This cost will be amortized on an accelerated method basis over a period of approximately 1.4 years and will be adjusted for subsequent changes in estimated forfeitures.

The following table shows total stock-based compensation costs included in the condensed consolidated statements of operations:

	Three Months Ended				Six Months Ended
	December 30, 2012		January 1, 2012		December 30, 2012		January 1, 2012
	(In thousands)				(In thousands)
Cost of sales	$	250	$	215	$	541	$	334
Research and development		316		295		677		584
Selling, general and administrative		1,121		1,170		2,241		1,925
Pre-tax stock-based compensation expense		1,687		1,680		3,459		2,843
Less: Income Tax effect		624		622		1,280		1,052
Total	$	1,063	$	1,058	$	2,179	$	1,791

The above table includes expense of $0.2 million and $0.3 million, relating to the employee stock purchase plan (ESPP) for the second quarter and first six months of both fiscal 2013 and 2012.

Performance Awards

In the second quarter of fiscal 2012, the Company communicated its intention to grant 110,000 shares of performance based restricted stock to its executive management employees subject to the achievement of certain financial performance targets. The number of stock awards that will ultimately be granted depends on actual business performance measured for fiscal 2012 against certain targets for revenue and profitability for the Company’s business as well as continued employment with the Company. During the first quarter of fiscal 2013, 92,620 restricted shares were granted upon achievement of financial performance targets.

In the second quarter of fiscal 2013, the Company communicated its intention to grant 103,000 shares of performance based restricted stock to its executive management employees subject to the achievement of certain financial performance targets. The number of stock awards that will ultimately be granted depends on actual business performance measured for fiscal 2013 against certain targets for revenue and profitability for the Company’s business as well as continued employment with the Company.

13

Stock Repurchases

During the second quarter of fiscal 2013, we repurchased 257,927 shares of common stock pursuant to our repurchase program for an aggregate price of approximately $1.6 million. Further, we repurchased 77,234 shares in the second quarter of fiscal 2013 for an aggregate price of approximately $0.5 million to cover the cost of employee income taxes on vested restricted stock and option exercises.

As of December 30, 2012, the total number of shares available for repurchase under the repurchase program authorized by the Board of Directors was approximately 1.9 million.

Note 8. Restructuring Charges

The following table shows the details of the restructuring cost accruals, which consist of facilities and severance costs, at December 30, 2012 and July 1, 2012:

	July 1, 2012		Expense Additions			Payments			December 30, 2012
	(in thousands)
Lease loss accrual (fiscal 2004)	$	137	$	2		$	(20	)	$	119
All other restructuring changes (fiscal 2004)		68		30			(47	)		51
Lease loss accrual (fiscal 2009)		902		40			(167	)		775
All other restructuring changes (fiscal 2010)		75		(165	)		164			74
Lease loss accrual (fiscal 2011)		170		2			(25	)		147
Lease loss accrual (fiscal 2012)		698		9			(154	)		553
All other restructuring changes (fiscal 2012)		159		202			(287	)		74
All other restructuring changes (fiscal 2013)		—		1,077			(1,027	)		50
Total	$	2,209	$	1,197		$	(1,563	)	$	1,843

During the first six months of fiscal 2013, we incurred approximately $1.1 million severance, consulting and outside service charges related to closing of research and development operations in China.

The lease loss accruals are subject to periodic revisions based on current market estimates. The lease loss accruals as of December 30, 2012 will be paid over the next five years.

Note 9. Net Income (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding and common equivalent shares from dilutive stock options, employee stock purchase plan and restricted stock using the treasury stock method, except when antidilutive.

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The following table reconciles the number of shares utilized in the net income (loss) per share calculations:

	Three Months Ended						Six Months Ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
	(In thousands, except per share amounts)
Numerator:
Net income (loss)	$	(1,775	)	$	2,445		$	(1,978	)	$	5,194
Shares (denominator):
Weighted average common shares outstanding		40,720			42,530			40,772			42,715
Weighted average common shares outstanding subject to repurchase		(364	)		(238	)		(340	)		(225	)
Weighted average shares outstanding—basic		40,356			42,292			40,432			42,490
Weighted average dilutive share equivalents from stock options		—			355			—			392
Weighted average dilutive common shares subject to repurchase		—			115			—			107
Weighted average shares outstanding—diluted		40,356			42,762			40,432			42,989
Earnings (loss) per share:
Basic	$	(0.04	)	$	0.06		$	(0.05	)	$	0.12
Diluted	$	(0.04	)	$	0.06		$	(0.05	)	$	0.12

Unvested restricted stock is subject to repurchase by the Company and therefore is not included in the calculation of the weighted-average shares outstanding for basic earnings per share.

The following common stock equivalents were excluded from the earnings (loss) per share calculation as their effect would have been anti-dilutive:

	Three Months Ended				Six Months Ended
	December 30, 2012		January 1, 2012		December 30, 2012		January 1, 2012
	(In thousands)				(In thousands)
Stock options		7,855		5,531		7,569		4,785
Common shares subject to repurchase		364		—		340		—
Total shares of common stock excluded from diluted net income (loss) per share calculation		8,219		5,531		7,909		4,785

Note 10. Litigation and Contingencies

Litigation—The Company is or was a party to the following material litigations:

Former Texas Facility Environmental Cleanup

We formerly leased a tract of land in Texas for our operations. Those operations involved the use of solvents and, at the end of the lease, we remediated an area where the solvents had been deposited on the ground and obtained regulatory approval for that remedial activity. In 1996, an environmental investigation of the property detected those same contaminants in groundwater in excess of then current regulatory standards. The groundwater contamination has migrated to some adjacent properties. We have entered into the Texas Natural Resource Conservation Commission’s Voluntary Cleanup Program (the “Voluntary Cleanup Program”) to obtain regulatory approval for closure of this site and a release from liability to the State of Texas for subsequent landowners and lenders. We have notified adjacent property owners affected by the contamination of participation in the Voluntary Cleanup Program. On May 20, 2004, we received a demand from the owner of several adjacent lots for damages in the amount of $1.3 million, as well as seeking an indemnity for the contamination and a promise to remediate the contamination. On March 14, 2006, the adjacent property owner filed suit in Probate Court No. 1, Travis County, Texas (Anna B. Miller, Individually and as Executrix of the Estate of Robert L. Miller, et al. vs. Austron, Inc., et al.), seeking damages. Symmetricom has not yet been served in this matter, but we intend to defend this lawsuit vigorously. We are continuing to work on the remediation of the formerly leased site as well as the adjacent properties, and have also taken steps to begin work on the Miller property. As of December 30, 2012, we had an accrual of $50,000 for remediation costs and other ongoing monitoring costs which has been included within “other accrued liabilities” on our condensed consolidated balance sheet.

Michael E. McNeil, et al. vs. Jason Book, et al.

On or around May 25, 2010, Symmetricom was served with the first amended complaint in the case of Michael E. McNeil, et al. vs. Jason Book, et al. (Case No. CV165643) filed in Santa Cruz County Superior Court, California. The first amended complaint added Symmetricom and several other parties to the lawsuit, which had been originally filed in 2009 by plaintiffs against their former attorney for legal malpractice in connection with certain settlement agreements in 1999 between plaintiffs and Datum (a company acquired by Symmetricom) in which they assigned to Datum certain intellectual property rights. The complaint has since been

15

amended for the second time and Symmetricom was served with the second amended complaint on or around January 7, 2011. The second amended complaint alleges several causes of action, including claims against Symmetricom for contract rescission, breach of contract, conversion and unjust enrichment, and seeks unspecified monetary damages along with equitable relief. Management believes that this lawsuit has no merit or basis and intends to defend this lawsuit vigorously and as a result, no accrual has been made in relation to this litigation. Management believes the final outcome of this matter will not have a material adverse effect on our financial position and results of operations.

General

Under the indemnification provisions of our standard sales contracts, we agree to defend the customer against third party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks or trade secrets, and to pay any judgments entered on such claims against the reseller/customer. The exposure to us under these indemnification provisions is generally limited to the total amount paid by the customer under the agreement. However, certain agreements include indemnification provisions that could potentially expose us to losses in excess of the amount received under the agreement. To date, there have been no claims under such indemnification provisions. We believe the estimated fair value of these indemnification agreements is not material.

We are also a party to certain other claims in the normal course of our operations. While the results of these claims cannot be predicted with any certainty, we believe that the final outcome of these matters will not have a material adverse effect on our consolidated financial position and results of operations.

Note 11. Business Segment Information

Symmetricom is organized into two operating segments: Communications and Government and Enterprise. These two operating segments are our reporting segments. The Chief Operating Decision Maker (CODM), as defined by authoritative accounting guidance on Segment Reporting, is our President and Chief Executive Officer (CEO). Our CEO allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss) before interest and taxes.

With the exception of intangible assets, we do not identify or allocate assets by operating segment, nor does our CEO evaluate operating segments using discrete asset information. We do not allocate restructuring charges, interest and other income, interest expense, or income taxes to operating segments.

The following describes our two reporting segments:

Communications

Our Communications business supplies timing technologies and services for worldwide communications infrastructure. Products include primary reference sources, synchronization distribution systems and embedded components and software, all of which support the timing and synchronization requirements of telecommunications and cable networks and equipment.

Government and Enterprise

Our Government and Enterprise business provides time technology products for aerospace/defense, IT infrastructure and science and metrology applications. Precision time and frequency systems enable a range of critical operations, including the international time scale, global navigation, the management of power grids, synchronization of complex control systems, and signals intelligence for securing communications in remote and hostile environments.

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Segment revenue, gross profit and operating income (loss) were as follows during the periods presented:

Three months ended December 30, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	26,188	$	22,963	$	—		$	49,151
Cost of sales		13,425		14,674		51			28,150
Gross profit		12,763		8,289		(51	)		21,001
Operating expenses		9,098		6,669		8,048			23,815
Operating income (loss)	$	3,665	$	1,620	$	(8,099	)	$	(2,814	)

Three months ended January 1, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	33,307	$	24,987	$	—		$	58,294
Cost of sales		16,856		15,554		674			33,084
Gross profit		16,451		9,433		(674	)		25,210
Operating expenses		9,518		6,746		5,303			21,567
Operating income (loss)	$	6,933	$	2,687	$	(5,977	)	$	3,643

Six months ended December 30, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	57,627	$	47,915	$	—		$	105,542
Cost of sales		28,635		31,598		6			60,239
Gross profit		28,992		16,317		(6	)		45,303
Operating expenses		18,789		13,857		15,850			48,496
Operating income (loss)	$	10,203	$	2,460	$	(15,856	)	$	(3,193	)

Six months ended January 1, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	66,877	$	47,795	$	—		$	114,672
Cost of sales		33,135		29,291		1,091			63,517
Gross profit		33,742		18,504		(1,091	)		51,155
Operating expenses		19,248		13,015		11,160			43,423
Operating income (loss)	$	14,494	$	5,489	$	(12,251	)	$	7,732

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The information in the Corporate category above represents corporate-related costs that are not allocated to either of our two segments for the purpose of evaluating their performance. The following table outlines our major corporate-related costs:

	Three Months Ended				Six Months Ended
	December 30, 2012		January 1, 2012		December 30, 2012		January 1, 2012
	(In thousands)				(In thousands)
Selling, general and administrative costs	$	6,912	$	5,200	$	14,659	$	10,961
Restructuring charges		1,187		777		1,197		1,290
Corporate-related total	$	8,099	$	5,977	$	15,856	$	12,251

12. Business Combination

During the third quarter of fiscal 2012, the Company acquired a product line (existing technology, customer relationships, fixed assets and employees) to enhance the Company’s product offerings in embedded timing and synchronization solutions for residential small cell solutions. This transaction was recorded as an acquisition of a business. The transaction price was approximately $2.4 million of which $1.4 million was paid in cash and approximately $1.0 million is contingent consideration payable as a royalty upon future sales of such products.

The fair value of the contingent consideration arrangement at the acquisition date was $0.5 million. We estimated the fair value of the contingent consideration using a probability-weighted discounted cash flow model (See Note 2). The purchase price was determined as follows (amounts in thousands):

Initial cash payment	$	1,400
Fair value of contingent consideration		540
Total	$	1,940

This purchase price was allocated to fixed assets and intangible assets based on their estimated fair values as follows (amounts in thousands):

Fixed assets	$	50
Intangible assets		1,890
Total	$	1,940

The estimated fair value of intangible assets acquired under the transaction consists of the following (in thousands):

Existing technology (estimated useful life 4 years)	$	1,612
Customer relationships (estimated useful life 2 years)		278
Total	$	1,890

The fair value of the acquired non-monetary assets, summarized above, were derived from significant unobservable inputs (“Level 3 inputs”) determined by the Company based on market analysis, income analysis (discounted cash flow model), or cost approach. The fair value of fixed assets acquired was determined using market data for similar assets. The fair value of existing technology was determined using a discounted cash flow model from cash flow projections prepared by management, including estimated undiscounted cash flows of approximately $3 million during the five to six year period after the acquisition, and a weighted average cost of capital. The fair value of customer relationships was determined using a cost approach which includes an estimate of time and expenses required to recreate the intangible asset.

During the second quarter of fiscal 2013, the Company acquired a product line (existing technology, inventories, and support from the former owner) to enhance the Company’s product offerings of test and measurement solutions. This transaction has been recorded as an acquisition of a business. The transaction price was approximately $0.5 million payable in cash in periodic installments to the former owner. The purchase price was entirely allocated to existing technology (the acquired intangible asset) which has an estimated useful life of 5 years.

Pro forma results of operations have not been presented because the effect of the business combinations described in this Note was not material to our condensed consolidated results of operations. Revenue and earnings per share for the acquired businesses from the date of acquisition through December 30, 2012, were not material.

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13. Subsequent Event

On January 21, 2013, the Company’s Board of Directors approved a restructuring action to reduce operating costs while retaining focus on its strategic initiatives. The Company plans to reduce the size of its workforce by approximately 20 positions. The reductions will begin in January and are expected to be complete by August 2013. In conjunction with the headcount reduction, the Company will further reduce the size of its facility presence in Santa Rosa, CA. The Company expects to incur restructuring charges in the range of $1.5 million to $1.8 million in connection with the plan. This includes $1.0 million to $1.3 million in expected charges for one-time termination benefits and $0.5 million associated with the Company’s reduction of occupied commercial space in Santa Rosa, CA. Upon completion, Symmetricom expects these restructuring actions to reduce annual costs by approximately $4.0 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with the condensed consolidated financial statements and related notes included elsewhere in this report.

When used in this discussion or elsewhere in this report, the words “expects,” “anticipates,” “estimates,” “believes,” “plans,” “will,” “intend,” “can” and similar expressions are intended to identify forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

These risks and uncertainties include, but are not limited to, risks relating to general economic conditions in the markets we address and the telecommunications market in general, risks related to the development of our new products and services, our reliance on our contract manufacturer, the effects of increasing competition and competitive pricing pressure, uncertainties associated with changing intellectual property laws, developments in and expenses related to litigation, inability to obtain sufficient amounts of key components, the rescheduling or cancellations of key customer orders, the loss of a key customer, the effects of new and emerging technologies, the risk that excess inventory may result in write-offs, price erosion and decreased demand, fluctuations in the rate of exchange of foreign currency, changes in our effective tax rate, market acceptance of our new products and services, technological advancements, undetected errors or defects in our products, the risks associated with our international sales, potential short-term investment losses and other risks due to credit market dislocation, geopolitical risks and risk of terrorist activities, the risks associated with attempting to integrate other companies and businesses we acquire, and the other risks set forth below in Part II, Item 1A, “Risk Factors.”

These forward-looking statements speak only as of the date hereof. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances or on which any such statement is based.

All references to “Symmetricom,” “we,” “us,” and “our” mean Symmetricom, Inc. and its subsidiaries, except where it is made clear that the term means only the parent company. Dollar amounts in the tables in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are in thousands.

Overview

Symmetricom is a leading source worldwide of highly precise timekeeping technologies, instruments and solutions. We generate, distribute and apply precise time for the communications, aerospace/defense, IT infrastructure and metrology industries. Symmetricom’s customers, from communications service providers and network equipment manufacturers to governments and their suppliers worldwide, are able to build more reliable networks and systems by using our advanced timing technologies, atomic clocks, services and solutions. Our products support today’s precise timing standards, including GPS-based timing, IEEE 1588 (PTP), Network Time Protocol (NTP), Synchronous Ethernet, Building Integrated Timing Supply (BITS) and Data Over Cable Service Interface Specifications (DOCSIS(R)) timing.

Critical Accounting Estimates

Our condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures at the date of our financial statements. On an ongoing basis, management evaluates its estimates and judgments. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes

19

in the estimate that are reasonably likely to occur could materially impact the financial statements. We believe that there have been no significant changes during the three and six months ended December 30, 2012 to the items that we disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended July 1, 2012.

Known Trends and Uncertainties Impacting Future Results of Operations

Current macro-economic factors are dynamic and uncertain and are likely to remain so for the remainder of fiscal year 2013. If economic conditions remain uncertain or worsen, or if there are further reductions in government and/or defense spending, our customers may delay or reduce capital expenditures. Among other things, these factors could result in reductions in sales of our products, longer sales cycles, difficulties in collecting accounts receivable, additional excess and obsolete inventory, gross margin deterioration, slower adoption of new technologies, increased price competition and supplier difficulties. Further, our future results may be adversely impacted if the costs associated with the restructuring plan that we announced in January 2013 exceed current estimates or if the Company is unable to recognize anticipated cost savings associated with the plan. See Item 1 of Part I, Financial Statements—Note 13—Subsequent Event.

Results of Operations

The following table presents selected items in our condensed consolidated statements of operations as a percentage of total net revenue for the three and six months ended December 30, 2012 and January 1, 2012:

	Three Months Ended						Six Months Ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
Net revenue
Communications		53.3	%		57.1	%		54.6	%		58.3	%
Government and Enterprise		46.7	%		42.9	%		45.4	%		41.7	%
Total net revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of products and services		56.7	%		55.3	%		56.6	%		54.1	%
Acquisition-related costs		0.5	%		0.3	%		0.5	%		0.3	%
Restructuring charges		0.1	%		1.2	%		(0.0	)%		1.0	%
Gross profit		42.7	%		43.2	%		42.9	%		44.6	%
Operating expenses:
Research and development		15.9	%		11.2	%		15.3	%		11.7	%
Selling, general and administrative		30.1	%		25.5	%		29.4	%		25.9	%
Amortization of intangible assets		0.2	%		0.1	%		0.2	%		0.1	%
Restructuring charges		2.3	%		0.2	%		1.1	%		0.2	%
Operating income (loss)		(5.7	)%		6.2	%		(3.0	)%		6.7	%
Interest income, net of amortization (accretion) of premium (discount) on investments		0.4	%		(0.5	)%		0.1	%		(0.2	)%
Income (loss) before taxes		(5.4	)%		5.7	%		(2.9	)%		6.5	%
Income tax provision (benefit)		(1.8	)%		1.5	%		(1.0	)%		2.0	%
Net income (loss)		(3.6	)%		4.2	%		(1.9	)%		4.5	%

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Net Revenue:

	Three Months Ended						$ Change			% Change			Six Months Ended						$ Change			% Change
	December 30, 2012			January 1, 2012									December 30, 2012			January 1, 2012
Net Revenue:
Communications	$	26,188		$	33,307		$	(7,119	)		(21.4	)%	$	57,627		$	66,877		$	(9,250	)		(13.8	)%
Government and Enterprise		22,963			24,987			(2,024	)		(8.1	)		47,915			47,795			120			0.3
Total Net Revenue	$	49,151		$	58,294		$	(9,143	)		(15.7	)%	$	105,542		$	114,672		$	(9,130	)		(8.0	)%
Percentage of Revenue		100.0	%		100.0	%								100	%		100	%

Second Quarter of Fiscal 2013: Net revenue consists of sales of products, software licenses and services. In the second quarter of fiscal 2013, net revenue decreased $9.1 million, or 15.7%, compared to the corresponding quarter of fiscal 2012. The decrease in Communications revenue is due to lower communications service provider spending on wireline-related equipment, which resulted in lower sales of Traditional Sync and Cable DTI products, partially offset by higher Embedded Systems revenue. The decrease in Government and Enterprise segment revenue is due to lower U.S. government spending which resulted in a decrease in instruments, clocks, and sync server sales, partially offset by higher Quantum™ Chip Scale Atomic Clock (CSAC) revenue.

First Six Months of Fiscal 2013: In the first six months of fiscal 2013, net revenue decreased $9.1 million, or 8.0%, compared to the corresponding period of fiscal 2012. Communications revenue decreased $9.3 million, or 13.8%, compared to the same period for the prior year, due to lower sales of Traditional Sync, and Cable DTI products, partially offset by higher Embedded Systems revenue. Government and Enterprise segment revenue remained comparable to the corresponding period of fiscal 2012.

Gross Profit:

	Three Months Ended						$ Change			% Change			Six Months Ended						$ Change			% Change
	December 30, 2012			January 1, 2012									December 30, 2012			January 1, 2012
Gross Profit:
Communications	$	12,763		$	16,451		$	(3,688	)		(22.4	)%	$	28,992		$	33,742		$	(4,750	)		(14.1	)%
Government and Enterprise		8,289			9,433			(1,144	)		(12.1	)		16,317			18,504			(2,187	)		(11.8	)
Corporate related		(51	)		(674	)		623			(92.4	)		(6	)		(1,091	)		1,085			(99.5	)
Total Gross Profit	$	21,001		$	25,210		$	(4,209	)		(16.7	)%	$	45,303		$	51,155		$	(5,852	)		(11.4	)%
Percentage of Revenue		42.7	%		43.2	%								42.9	%		44.6	%

Second Quarter of Fiscal 2013: Gross profit in the second quarter of fiscal 2013 decreased by $4.2 million, or 16.7%, compared to the corresponding quarter of fiscal 2012. Gross profit as a percentage of revenue in the second quarter of fiscal 2013 decreased to 42.7% as compared to 43.2% in the corresponding quarter of fiscal 2012 due to an unfavorable shift in sales mix to lower margin products.

Gross profit for our Communications segment decreased 22.4% in the second quarter of fiscal 2013 compared to the corresponding quarter of fiscal 2012 and the revenue in this segment decreased by 21.4% compared to the same period in the prior year. Gross profit for our Government and Enterprise segment decreased by 12.1% in the second quarter of fiscal 2013 compared to the corresponding quarter of fiscal 2012 due to an 8.1% decrease in revenue and a higher mix of Government Programs and CSAC revenue, which have lower gross margins.

Corporate related charges decreased by $0.6 million, or 92.4%, in the second quarter of fiscal 2013 due to lower restructuring charges in the second quarter of fiscal 2013.

First Six Months of Fiscal 2013

Gross profit in the first six months of fiscal 2013 decreased by $5.9 million, or 11.4%, compared to the corresponding period of fiscal 2012. Gross profit as a percentage of revenue in the first six months of fiscal 2013 decreased to 42.9% as compared to 44.6% in the corresponding period of fiscal 2012 due primarily to an unfavorable shift in sales mix to lower margin products, partially offset by a decrease in corporate related charges.

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Gross profit for our Communications segment decreased by 14.1% in the first six months of fiscal 2013 compared to the corresponding period of fiscal 2012 and the revenue in this segment decreased 13.8% compared to the same period in the prior year. Gross profit for our Government and Enterprise segment decreased by 11.8% in the first six months of fiscal 2013 compared to the corresponding period of fiscal 2012. Revenue increased 0.3% compared to the same period in the prior year but there was a higher mix of Government Programs and CSAC revenue, which have lower gross margins.

Corporate related charges decreased $1.1 million, due to lower restructuring charges in the first six months of fiscal 2013.

Operating Expenses:

Research and Development Expense:

	Three Months Ended						$ Change		% Change			Six Months Ended						$ Change		% Change
	December 30, 2012			January 1, 2012								December 30, 2012			January 1, 2012
Research and development expense	$	7,805		$	6,548		$	1,257		19.2	%	$	16,118		$	13,446		$	2,672		19.9	%
Percentage of Revenue		15.9	%		11.2	%							15.3	%		11.7	%

Second Quarter of Fiscal 2013: Research and development expense consists primarily of salaries and benefits, prototype expenses and fees paid to outside consultants. These expenses increased in the second quarter of fiscal 2013 due to higher outside consulting, and prototype expenses for product development. We expect that research and development expenses in the third quarter of fiscal 2013 will be similar to or slightly higher than in the second quarter of fiscal 2013.

First Six Months of Fiscal 2013:

Research and development expenses in the first six months of fiscal 2013 were higher than the same period of fiscal 2012 due to higher outside consulting and prototype expenses for R&D product development.

Selling, General and Administrative:

	Three Months Ended						$ Change			% Change			Six Months Ended						$ Change		% Change
	December 30, 2012			January 1, 2012									December 30, 2012			January 1, 2012
Selling, general and administrative	$	14,778		$	14,864		$	(86	)		(0.6	)%	$	31,005		$	29,674		$	1,331		4.5	%
Percentage of Revenue		30.1	%		25.5	%								29.4	%		25.9	%

Second Quarter of Fiscal 2013: Selling, general and administrative expenses consist primarily of salaries, benefits, sales commissions and travel-related expenses for our sales and services, marketing, finance, human resources, information technology and facilities departments. Selling, general, and administrative expenses in the second quarter of fiscal 2013 were comparable to the same quarter of fiscal 2012. We expect that selling, general and administrative expenses in the third quarter of fiscal 2013 will be consistent with the second quarter of fiscal 2013.

First Six Months of Fiscal 2013:

Selling, general and administrative expenses were higher in the first six months of fiscal 2013 than the same period for fiscal 2012 due to an increase in the allowance for doubtful accounts, deferred compensation plan charges, and consulting fees, partially offset by lower sales commissions and incentive compensation.

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Amortization of intangible assets:

	Three Months Ended						$ Change		% Change			Six Months Ended						$ Change		% Change
	December 30, 2012			January 1, 2012								December 30, 2012			January 1, 2012
Amortization of intangible assets	$	86		$	52		$	34		65.4	%	$	172		$	104		$	68		65.4	%
Percentage of Revenue		0.2	%		0.1	%							0.2	%		0.1	%

Amortization of intangibles increased in the second quarter and first six months of fiscal 2013 compared to the corresponding period of fiscal 2012 due to higher amortization of intangible assets arising from the assets acquired after the second quarter of fiscal 2012, partially offset by certain assets being fully amortized before or during the first six months of fiscal 2013.

Restructuring charges:

	Three Months Ended						$ Change		% Change			Six Months Ended						$ Change		% Change
	December 30, 2012			January 1, 2012								December 30, 2012			January 1, 2012
Restructuring charges	$	1,146		$	103		$	1,043		1,012.6	%	$	1,201		$	199		$	1,002		503.5	%
Percentage of Revenue		2.3	%		0.2	%							1.1	%		0.2	%

Restructuring charges in the second quarter and first six months of fiscal 2013 consisted of severance, consulting and outside service charges related to the closing of the company’s research and development operations in China.

Interest income, net of amortization (accretion) of premium (discount) on investments:

	Three Months Ended						$ Change		% Change			Six Months Ended						$ Change		% Change
	December 30, 2012			January 1, 2012								December 30, 2012			January 1, 2012
Interest income, net of amortization (accretion) of premium (discount) on investments	$	178		$	(296	)	$	474		(160.1	)%	$	142		$	(230	)	$	372		(161.7	)%
Percentage of Revenue		0.4	%		(0.5	)%							0.1	%		(0.2	)%

Interest income, net of amortization (accretion) of premium (discount) on investments increased $0.5 million in the second quarter of fiscal 2013 compared to the same period of prior year due to lower amortization of premium on investments and a $0.1 million increase in fair value of mutual funds in the second quarter of fiscal 2012.

Interest income, net of amortization (accretion) of premium (discount) on investments increased $0.4 million in the first six months of fiscal 2013 compared to the same period of fiscal 2012 due to lower amortization of premium on investments in the first six months of fiscal 2013.

23

Income tax provision:

	Three Months Ended						$ Change			% Change			Six Months Ended						$ Change			% Change
	December 30, 2012			January 1, 2012									December 30, 2012			January 1, 2012
Income tax provision (benefit)	$	(861	)	$	902		$	(1,763	)		(195.5	)%	$	(1,073	)	$	2,308		$	(3,381	)		(146.5	)%
Percentage of Revenue		(1.8	)%		1.5	%								(1.0	)%		2.0	%

Second Quarter of Fiscal 2013: We recorded an income tax benefit of $0.9 million in the second quarter of fiscal 2013, compared to a provision of $0.9 million in the corresponding quarter of fiscal 2012. Our effective tax rate in the second quarter of fiscal 2013 was 32.6%, compared to an effective tax rate of 27% in the corresponding period of fiscal 2012. We recorded a tax benefit for the second quarter of fiscal 2013 due to the loss before income tax, partially offset by additional valuation allowance on foreign tax credit. The effective tax rate for the second quarter of fiscal 2012 benefited from the reversal of a reserve on an uncertain tax position due to expiration of the statute of limitation.

On January 2, 2013, the President signed into law The American Taxpayer Relief Act of 2012. Under prior law, a taxpayer was entitled to a research tax credit for qualifying amounts paid or incurred on or before December 31, 2011. The 2012 Taxpayer Relief Act extends the research credit for two years to Dec. 31, 2013. The extension of the research credit is retroactive and includes amounts paid or incurred after Dec. 31, 2011. As a result of the retroactive extension, we expect to recognize a benefit of approximately $220,000 for qualifying amounts incurred in Fiscal 2012. This benefit and the benefit on the Fiscal 2013 annual effective tax rate will be recognized in the period of enactment, which is the third quarter of fiscal year 2013.

First Six Months of Fiscal 2013: The income tax benefit was $1.1 million in the first six months of fiscal 2013, compared to an income tax provision of $2.3 million in the corresponding period of fiscal 2012. Our effective tax rate in the first six months of fiscal 2013 was 35.1%, compared to an effective tax rate of 30.8% in the corresponding period of fiscal 2012. The effective tax rate for the first 6 months of fiscal 2013 is relatively close to the statutory rate. The effective tax rate for the first six months of fiscal 2012 benefited from the utilization of a capital loss and from the reversal of a reserve on an uncertain tax position due to expiration of the statute of limitation.

Key Operating Metrics

Key operating metrics for measuring our performance include sales backlog and contract revenue. A comparison of these metrics at the end of the second quarter of fiscal 2013 with the end of fiscal 2012 is below:

Sales Backlog:

Our backlog consists of firm orders that have yet to be shipped to the customer, or may not be shippable to a customer until a future period. Most orders included in backlog can be rescheduled or cancelled by customers without significant penalty. Historically, a substantial portion of net revenue in any fiscal period has been derived from orders received during that fiscal period.

Our backlog amounted to $43.7 million as of December 30, 2012, compared to $45.4 million as of July 1, 2012. Our backlog, which is shippable within the next six months, was $32.9 million as of December 30, 2012, compared to $34.9 million as of July 1, 2012.

Liquidity and Capital Resources

Balance Sheet and Cash Flows

The following table summarizes our cash, cash equivalents and short-term investments:

	December 30, 2012		July 1, 2012		Change
Cash and cash equivalents	$	25,966	$	27,659	$	(1,693	)
Short-term investments		44,789		39,280		5,509
Total	$	70,755	$	66,939	$	3,816

As of December 30, 2012, our principal sources of liquidity consisted of cash, cash equivalents and short-term investments of $70.8 million and accounts receivable of $35.8 million.

As of December 30, 2012, working capital was $136.8 million compared to $140.0 million as of July 1, 2012. Cash, cash equivalents and short-term investments as of December 30, 2012 increased to $70.8 million from $66.9 million as of July 1, 2012.

Our days sales outstanding in accounts receivable was 66 days as of December 30, 2012, compared to 67 days as of July 1, 2012.

24

Our principal uses of cash historically have consisted of the purchase of inventories, payroll and other operating expenses related to the manufacturing of products, development of new products and purchase of property and equipment.

Cash flows from operating activities

Net cash provided by operating activities in the first six months of fiscal 2013 was $10.1 million. Net cash provided by operating activities consisted of non-cash charges of $7.6 million and net changes in assets and liabilities of $4.5 million, partially offset by a net loss of $2.0 million. The non-cash charges consisted of $3.2 million in depreciation and amortization, $3.5 million in stock-based compensation, $1.4 million in provision for excess and obsolete inventory, allowance for doubtful accounts of $0.6 million and $0.3 million of loss on disposal of fixed assets, partially offset by $1.4 million use of deferred income taxes. Net changes in assets and liabilities consisted primarily of a $9.6 million decrease in accounts receivable and a $2.4 million increase in accounts payable, partially offset by an increase in inventories of $2.0 million, decrease in other accrued liabilities of $2.2 million, decrease in accrued compensation of $2.0 million and increase in prepaids and other current assets of $1.2 million.

Cash flows from investing activities

Net cash used in investing activities was $8.4 million in the first six months of fiscal 2013, which represented the purchase of short-term investments and property, plant and equipment of $22.6 million and $2.3 million, respectively, partially offset by the sale/maturities of short-term investments of $16.5 million.

Cash flows from financing activities

Net cash used for financing activities was $3.5 million in the first six months of fiscal 2013, which represented the repurchase of common stock of $5.6 million, partially offset by cash generated from the issuance of common stock under our ESPP and exercise of common stock options of 2.1 million.

Contingencies

See Item 1 of Part I, Financial Statements—Note 10—Litigation and Contingencies.

Recently Issued Accounting Pronouncements

See Item 1 of Part I, Financial Statements—Note 1—Basis of Presentation and Recently Issued Accounting Pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk affecting Symmetricom see “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended July 1, 2012. Our exposure to market risk has not changed materially since July 1, 2012.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the fiscal quarter covered by this report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

25

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Item 1 of Part I, Financial Statements—Note 10—Litigation and Contingencies.

Item 1A. Risk Factors

In addition to the other information set forth in this report and the new risk factors set forth below, you should carefully consider the risk factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended July 1, 2012. The risks discussed in our Annual Report on Form 10-K and the new risk factors set forth below could materially affect our business, financial condition and results of operations. The risks described in our Annual Report on Form 10-K and the new risk factors set forth below are not the only risks facing us. Other risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition or operating results. Two new risk factors are set forth below:

Reductions in defense spending could adversely affect our business

In August 2011, Congress enacted the Budget Control Act of 2011 (the “BCA”), which requires spending caps and certain reductions in security spending over a ten-year period through 2021. Without additional congressional action, further budget cuts (or sequestration) as set forth in the BCA will be implemented. The impact of sequestration is yet to be fully determined. Significant additional reductions to defense spending could occur over the next decade, which could have a significant adverse impact on us. While congressional leadership is considering a variety of options to avoid sequestration, it remains uncertain as to whether the government will actually do so. In the event the sequestration is implemented as currently mandated, there could be a material adverse effect on our business and results of operations.

A decline in demand for Symmetricom’s mature products and technologies has adversely affected, and may continue to adversely affect, our business

A material amount of Symmetricom’s revenue is derived from products and technologies that are sold in relatively mature markets, such as the wireline and cable markets within our Communications business. We have experienced declining market demand for these products as our customers shift spending to newer technologies such as wireless infrastructure. We do not currently expect market demand for these and other mature products and technologies to increase. Accordingly, we expect our revenue from these products and technologies to be stagnant or to decline over time. However, the extent to which market demand for these mature products and technologies will affect our business cannot be predicted with certainty. Continuing decreases in market demand for these products and technologies, particularly if we are unable to offset these decreases with other sources of revenue, could materially adversely affect our revenue and profitability.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

a) Not applicable.

b) Not applicable.

c) The following table provides monthly detail regarding our share repurchases during the three months ended December 30, 2012:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Number of Shares That May Yet Be Purchased Under the Plans or Programs
October 1, 2012 through October 31, 2012		36,700	$	6.90		36,700		2,116,161
November 1, 2012 through November 30, 2012		260,236		6.09		221,227		1,894,934
December 1, 2012 through December 30, 2012		—		—		—		1,894,934
Total		296,936	$	6.21		257,927

During the second quarter of fiscal 2013, we repurchased 257,927 shares of common stock pursuant to our repurchase program for an aggregate price of approximately $1.6 million. Further, we repurchased 39,009 shares in the second quarter of fiscal 2013 for an aggregate price of $240,000 to cover the cost of employee income taxes on vested restricted stock.

On November 17, 2011, the Company’s Board of Directors authorized management to repurchase an additional 4.1 million shares of Symmetricom common stock in addition to the remaining shares available for repurchase under previously approved programs. As of December 30, 2012, the total number of shares available for repurchase under the repurchase program authorized by the Board of Directors was approximately 1.9 million.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

26

Item 6. Exhibits

Exhibit Number	Description of Exhibits
10.1	Amended and Restated Symmetricom, Inc. 2006 Incentive Award Plan (incorporated by reference from Appendix A to the Registrant’s Definitive Proxy Statement on schedule 14A (file no. 000-02287) filed on September 26, 2012).
10.2	Symmetricom, Inc. Director Compensation Policy.
31	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive Data File.

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on our behalf by the undersigned thereunto duly authorized.

	SYMMETRICOM, INC.
	(Registrant)
Date: February 7, 2013	By:	/S/    DAVID G. CÔTÉ
		David G. Côté
		Chief Executive Officer (Principal Executive Officer) and Director
Date: February 7, 2013	By:	/S/    JUSTIN R. SPENCER
		Justin R. Spencer
		Executive Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)

28

EX-10.2

Exhibit 10.2

SYMMETRICOM, INC.

DIRECTOR COMPENSATION POLICY

Approved December 20, 2012

Each member of the Board of Directors (the “Board”) of Symmetricom, Inc., a Delaware corporation (the “Company”), who is not employed by the Company or one of its subsidiaries (a “non-employee director”) shall be entitled to receive the compensation set forth below for his or her service as a member of the Board or a committee thereof. This policy may be amended, modified or terminated by the Board in the future in its sole discretion.

Cash Retainer Fees. Effective as of October 1, 2010, the annual cash retainer fees for non-employee directors shall be as follows:

Description	Amount
General Board Service	$	45,000
Committee Chair Service:
Audit Committee	$	20,000
Compensation Committee	$	16,000
Nominating and Governance Committee	$	9,000
Committee Member Service:
Audit Committee	$	10,000
Compensation Committee	$	8,000
Nominating and Governance Committee	$	4,500
Additional Retainer for Non-Executive Chair	$	25,000

• The retainer fees described above will be paid on a quarterly basis, with each installment equal to 25% of the applicable annual amount, and shall be paid in advance on the first business day of each fiscal quarter of the Company. The chair of each committee shall be entitled to receive only the Committee Chair Service retainer, and the Committee Member Service retainer shall be payable to each member of a respective committee other than the chair of such committee.

• In addition, a non-employee director may elect to defer the payment of the above-referenced cash retainer fees in accordance with the terms and conditions of the Company’s Deferred Compensation Plan, as amended.

• A non-employee director will not receive any additional fee for attending a Board meeting or a meeting of a committee of the Board, regardless of whether the meeting is in person or by telephone.

Equity Compensation. Effective as of January 3, 2012, the equity compensation for non-employee directors shall be as described below. Each equity grant described below shall be subject to the terms and conditions of the Company’s 2006 Incentive Award Plan, as amended (the “2006 Plan”), or any successor equity compensation plan approved by the Company’s

stockholders and in effect at the time of grant, as well as the terms of the Company’s form of non-employee director stock option agreement or restricted stock agreement, as applicable, in effect on the date of grant of the award.

Initial Option Grant. Each non-employee director who first joins the Board after the date hereof shall receive an option to purchase 40,000 shares of the Company’s common stock on the date of his or her appointment or election to the Board (an “Initial Option”).

The Initial Option will (i) have a term of seven years, (ii) have a per share exercise price equal to the fair market value of a share of the Company’s common stock on the grant date (as determined in accordance with the 2006 Plan), and (iii) will vest over a period of three years (with 25% of the shares vesting on each of the first two anniversaries of the grant date, and 50% of the shares vesting on the third anniversary of the grant date), subject to the non-employee director’s continued service through the applicable vesting date, and full acceleration of vesting upon the occurrence of a “Change of Control” (as defined in the 2006 Plan).

Annual Equity Awards. On the date of each annual stockholders meeting of the Company occurring on or after the date this Director Compensation Policy, as amended, is approved, each non-employee director will receive the following equity awards:

• A non-statutory stock option to purchase 14,000 shares of common stock with (i) a term of seven years, (ii) a per share exercise price equal to the fair market value of a share of the Company’s common stock on the grant date (as determined in accordance with the 2006 Plan), and (iii) 100% vesting of the shares subject to the option on the earlier to occur of (a) the first anniversary of the grant date or (b) the date of the Company’s first annual stockholders meeting following the grant date, subject to the non-employee director’s continued service through such date, and full acceleration of vesting upon the occurrence of a “Change of Control” (as defined in the 2006 Plan).

• A restricted stock award of 7,000 shares of the Company’s common stock, with 100% vesting of such shares on the earlier to occur of (a) the first anniversary of the grant date or (b) the date of the Company’s first annual stockholders meeting following the grant date, subject to the non-employee director’s continued service through such date, and full acceleration of vesting upon the occurrence of a “Change of Control” (as defined in the 2006 Plan).

Expense Reimbursement. A non-employee director shall be entitled to reimbursement from the Company for his or her reasonable travel (including airfare and ground transportation), lodging and meal expenses incident to meetings of the Board or committees thereof or in connection with other Board- related business, subject to compliance with the Company’s applicable reimbursement policies and the submission by the non-employee director of any required written substantiation for the expenses.

EX-31

Exhibit 31

CERTIFICATION

I, David G. Côté, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Symmetricom, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 7, 2013

/s/    DAVID G. CÔTÉ        

David G. Côté

Chief Executive Officer and Director

CERTIFICATION

I, Justin R. Spencer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Symmetricom, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 7, 2013

/s/    JUSTIN R. SPENCER        

Justin R. Spencer

Executive Vice President, Chief Financial Officer and Secretary

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, David G. Côté, Chief Executive Officer of Symmetricom, Inc. (the “Company”), pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify to my knowledge that:

i. the Quarterly Report on Form 10-Q of the Company for the quarterly period ended December 30, 2012 (the “Report”) fully complies with the requirements of Section 13 (a) or Section 15 (d), as applicable, of the Securities Exchange Act of 1934, as amended; and

ii. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

DATE: February 7, 2013	By:	/s/    DAVID G. CÔTÉ
		David G. Côté
		Chief Executive Officer

* * * * *

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Justin R. Spencer, Chief Financial Officer of Symmetricom, Inc. (the “Company”), pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify to my knowledge that:

i. the Quarterly Report on Form 10-Q of the Company for the quarterly period ended December 30, 2012 (the “Report”) fully complies with the requirements of Section 13 (a) or Section 15 (d), as applicable, of the Securities Exchange Act of 1934, as amended; and

ii. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

DATE: February 7, 2013	By:	/s/    JUSTIN R. SPENCER
		Justin R. Spencer Executive Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer)

XML

Intangible Assets - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization expense	$ 86	$ 52	$ 172	$ 104

XML

Business Combination - Additional Information (Detail) (USD $)	3 Months Ended
	Dec. 30, 2012	Apr. 01, 2012
Acquired Finite-Lived Intangible Assets [Line Items]
Transaction price for acquisition of business	$ 500,000	$ 2,400,000
Initial cash payment		1,400,000
Contingent consideration payable for acquisition of business		1,000,000
Fair value of the contingent consideration arrangement at the acquisition date		540,000
Estimated undiscounted cash flow of asset acquired	$ 3,000,000
Estimated useful life of acquired intangible asset	5 years

XML

Restructuring Charges - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Restructuring Cost and Reserve [Line Items]
Restructuring activities	$ 1,146	$ 103	$ 1,201	$ 199
Research and development operations [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring activities			$ 1,100
Lease loss accruals payment period			5 years

XML

Business Combination - Purchase Price of Contingent Consideration (Detail) (USD $)	Apr. 01, 2012
Business Acquisition, Contingent Consideration [Line Items]
Initial cash payment	$ 1,400,000
Fair value of contingent consideration	540,000
Total	$ 1,940,000

XML

Stockholders' Equity - Stock-Based Compensation Costs Included in Condensed Consolidated Statements of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Pre-tax stock-based compensation expense	$ 1,687	$ 1,680	$ 3,459	$ 2,843
Less: Income Tax effect	624	622	1,280	1,052
Total	1,063	1,058	2,179	1,791
Cost of sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Pre-tax stock-based compensation expense	250	215	541	334
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Pre-tax stock-based compensation expense	316	295	677	584
Selling, general and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Pre-tax stock-based compensation expense	$ 1,121	$ 1,170	$ 2,241	$ 1,925

XML

Financial Instruments - Summarizes Available-for-Sale and Trading Securities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Jul. 01, 2012
Schedule of Available-for-sale Securities [Line Items]
Less than 1 year, Amortized Cost	$ 22,373
Due in 1 to 3 years, Amortized Cost	19,527
Total, Amortized Cost	54,860	47,930
Less than 1 year, Fair Value	22,385
Due in 1 to 3 years, Fair Value	19,520
Total, Fair Value	$ 41,905

XML

Business Combination - Estimated Fair Value of Intangible Assets Acquired under the Transaction (Detail) (USD $) In Thousands, unless otherwise specified	Apr. 01, 2012
Acquired Finite-Lived Intangible Assets [Line Items]
Total	$ 1,890
Existing technology [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Total	1,612
Customer relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Total	$ 278

XML

Long-term Obligations (Tables)

6 Months Ended

Dec. 30, 2012

Long-Term Obligations

Long-term obligations consist of:

	December 30, 2012		July 1, 2012
	(In thousands)
Long-term obligations:
Deferred revenue	$	2,029	$	2,254
Lease loss accrual, net		963		1,240
Rent accrual		1,043		1,102
Post-retirement benefits		193		173
Income tax		216		216
Consideration for acquired businesses		795		487
Total	$	5,239	$	5,472

XML

Net Income (Loss) Per Share - Schedule of Common Stock Equivalents Excluded from Diluted Earnings per Share Calculation (Detail) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options	7,855	5,531	7,569	4,785
Common shares subject to repurchase	364		340
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options	8,219	5,531	7,909	4,785

XML

Stockholders' Equity - Stock Award Activity (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Dec. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance, Shares Available For Grant	2,889
Granted-options, Shares Available For Grant	(1,280)
Granted-restricted shares, Shares Available For Grant	(406)
Exercised, Shares Available For Grant
Vested, Shares Available For Grant
Cancelled, Shares Available For Grant	140
Ending Balance, Shares Available For Grant	1,343
Ending Balance, Weighted Average Exercise Price Per Share	$ 5.65
Ending Balance, Number of Shares	8,140
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, Number of Shares	261
Granted-options, Number of Shares
Granted-restricted shares, Number of Shares	203
Exercised, Number of Shares
Vested, Number of Shares	(107)
Cancelled, Number of Shares
Ending balance, Number of Shares	357
Beginning balance, Weighted Average Grant-Date Fair Value	$ 5.68
Granted-options, Weighted Average Grant-Date Fair Value
Granted-restricted shares, Weighted Average Grant-Date Fair Value	$ 6.19
Exercised, Weighted Average Grant-Date Fair Value
Vested, Weighted Average Grant-Date Fair Value	$ 5.94
Cancelled, Weighted Average Grant-Date Fair Value
Ending balance, Weighted Average Grant-Date Fair Value	$ 5.89
Non Performance-based Options Outstanding [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning Balance, Weighted Average Exercise Price Per Share	$ 5.54
Granted-options, Weighted Average Exercise Price Per Share	$ 6.14
Granted-restricted shares, Weighted Average Exercise Price Per Share
Exercised, Weighted Average Exercise Price Per Share	$ 4.88
Vested, Weighted Average Exercise Price Per Share
Cancelled, Weighted Average Exercise Price Per Share	$ 5.85
Ending Balance, Weighted Average Exercise Price Per Share	$ 5.65
Beginning balance, Number of Shares	7,316
Vested, Number of Shares
Granted-options, Number of Shares	1,280
Granted-restricted shares, Number of Shares
Exercised, Number of Shares	(316)
Cancelled, Number of Shares	(140)
Ending Balance, Number of Shares	8,140

XML

Intangible Assets - Other Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Jul. 01, 2012
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 33,723	$ 33,273
Accumulated Amortization	(30,359)	(29,815)
Net Intangible Assets	3,364	3,458
Purchased technology [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	26,420	25,970
Accumulated Amortization	(24,215)	(23,845)
Net Intangible Assets	2,205	2,125
Customer lists and trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	7,303	7,303
Accumulated Amortization	(6,144)	(5,970)
Net Intangible Assets	$ 1,159	$ 1,333

XML

Business Segment Information - Schedule of business segment information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Segment Reporting Information [Line Items]
Net revenue	$ 49,151	$ 58,294	$ 105,542	$ 114,672
Cost of sales	28,150	33,084	60,239	63,517
Gross profit	21,001	25,210	45,303	51,155
Operating expenses	23,815	21,567	48,496	43,423
Operating income (loss)	(2,814)	3,643	(3,193)	7,732
Selling, general and administrative costs	14,778	14,864	31,005	29,674
Restructuring charges	1,146	103	1,201	199
Communications [Member]
Segment Reporting Information [Line Items]
Net revenue	26,188	33,307	57,627	66,877
Cost of sales	13,425	16,856	28,635	33,135
Gross profit	12,763	16,451	28,992	33,742
Operating expenses	9,098	9,518	18,789	19,248
Operating income (loss)	3,665	6,933	10,203	14,494
Government and Enterprise [Member]
Segment Reporting Information [Line Items]
Net revenue	22,963	24,987	47,915	47,795
Cost of sales	14,674	15,554	31,598	29,291
Gross profit	8,289	9,433	16,317	18,504
Operating expenses	6,669	6,746	13,857	13,015
Operating income (loss)	1,620	2,687	2,460	5,489
Corporate [Member]
Segment Reporting Information [Line Items]
Cost of sales	51	674	6	1,091
Gross profit	(51)	(674)	(6)	(1,091)
Operating expenses	8,048	5,303	15,850	11,160
Operating income (loss)	(8,099)	(5,977)	(15,856)	(12,251)
Intersegment Elimination [Member]
Segment Reporting Information [Line Items]
Selling, general and administrative costs	6,912	5,200	14,659	10,961
Restructuring charges	1,187	777	1,197	1,290
Corporate-related total	$ 8,099	$ 5,977	$ 15,856	$ 12,251

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Restructuring Charges - Schedule of Restructuring and Related Charges (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Restructuring Cost and Reserve [Line Items]
Beginning Balance			$ 2,209
Expense Additions	1,146	103	1,201	199
Payments			(1,563)
Ending Balance	1,843		1,843
Lease loss accrual (fiscal 2004) [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			137
Expense Additions			2
Payments			(20)
Ending Balance	119		119
All other restructuring changes (fiscal 2004) [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			68
Expense Additions			30
Payments			(47)
Ending Balance	51		51
Lease loss accrual (fiscal 2009) [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			902
Expense Additions			40
Payments			(167)
Ending Balance	775		775
All other restructuring changes (fiscal 2010) [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			75
Expense Additions			(165)
Payments			164
Ending Balance	74		74
Lease loss accrual (fiscal 2011) [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			170
Expense Additions			2
Payments			(25)
Ending Balance	147		147
Lease loss accrual (fiscal 2012) [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			698
Expense Additions			9
Payments			(154)
Ending Balance	553		553
All other restructuring changes (fiscal 2012) [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance			159
Expense Additions			202
Payments			(287)
Ending Balance	74		74
All other restructuring changes (fiscal 2013) [Member]
Restructuring Cost and Reserve [Line Items]
Beginning Balance
Expense Additions			1,077
Payments			(1,027)
Ending Balance	$ 50		$ 50

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Inventories

6 Months Ended

Dec. 30, 2012

Inventories

Note 3. Inventories

Components of inventories were as follows:

	December 30, 2012		July 1, 2012
	(In thousands)
Raw materials	$	19,950	$	21,003
Work-in-process		9,794		10,440
Finished goods		18,432		16,175
Inventories	$	48,176	$	47,618

XML

Stockholders' Equity - Stock Options Outstanding, Vested and Expected to Vest, and Exercisable (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Dec. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, Outstanding, Number of Shares	8,140
Options, Vested and expected to vest, Number of Shares	7,852
Options, Exercisable, Number of Shares	4,208
Options, Outstanding, Weighted Average Remaining Contractual Life	4 years 6 months 29 days
Options, Vested and expected to vest, Weighted Average Remaining Contractual Life	4 years 6 months 11 days
Options, Exercisable, Weighted Average Remaining Contractual Life	3 years 6 months
Options, Outstanding, Weighted Average Exercise Price	$ 5.65
Options, Vested and expected to vest, Weighted Average Exercise Price	$ 5.65
Options, Exercisable, Weighted Average Exercise Price	$ 5.64
Options, Outstanding, Aggregate Intrinsic Value	$ 3,179
Options, Vested and expected to vest, Aggregate Intrinsic Value	3,117
Options, Exercisable, Aggregate Intrinsic Value	$ 2,157

XML

Business Segment Information (Tables)

6 Months Ended

Dec. 30, 2012

Segment Revenue, Gross Profit and Operating Income (Loss)

Segment revenue, gross profit and operating income (loss) were as follows during the periods presented:

Three months ended December 30, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	26,188	$	22,963	$	—		$	49,151
Cost of sales		13,425		14,674		51			28,150
Gross profit		12,763		8,289		(51	)		21,001
Operating expenses		9,098		6,669		8,048			23,815
Operating income (loss)	$	3,665	$	1,620	$	(8,099	)	$	(2,814	)

Three months ended January 1, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	33,307	$	24,987	$	—		$	58,294
Cost of sales		16,856		15,554		674			33,084
Gross profit		16,451		9,433		(674	)		25,210
Operating expenses		9,518		6,746		5,303			21,567
Operating income (loss)	$	6,933	$	2,687	$	(5,977	)	$	3,643

Six months ended December 30, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	57,627	$	47,915	$	—		$	105,542
Cost of sales		28,635		31,598		6			60,239
Gross profit		28,992		16,317		(6	)		45,303
Operating expenses		18,789		13,857		15,850			48,496
Operating income (loss)	$	10,203	$	2,460	$	(15,856	)	$	(3,193	)

Six months ended January 1, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	66,877	$	47,795	$	—		$	114,672
Cost of sales		33,135		29,291		1,091			63,517
Gross profit		33,742		18,504		(1,091	)		51,155
Operating expenses		19,248		13,015		11,160			43,423
Operating income (loss)	$	14,494	$	5,489	$	(12,251	)	$	7,732

Corporate-Related Costs

The following table outlines our major corporate-related costs:

	Three Months Ended				Six Months Ended
	December 30, 2012		January 1, 2012		December 30, 2012		January 1, 2012
	(In thousands)				(In thousands)
Selling, general and administrative costs	$	6,912	$	5,200	$	14,659	$	10,961
Restructuring charges		1,187		777		1,197		1,290
Corporate-related total	$	8,099	$	5,977	$	15,856	$	12,251

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Net Income (Loss) Per Share (Tables)

6 Months Ended

Dec. 30, 2012

Schedule of Denominator Used in Calculation of Basic and Diluted Net Earnings per Share

The following table reconciles the number of shares utilized in the net income (loss) per share calculations:

	Three Months Ended						Six Months Ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
	(In thousands, except per share amounts)
Numerator:
Net income (loss)	$	(1,775	)	$	2,445		$	(1,978	)	$	5,194
Shares (denominator):
Weighted average common shares outstanding		40,720			42,530			40,772			42,715
Weighted average common shares outstanding subject to repurchase		(364	)		(238	)		(340	)		(225	)
Weighted average shares outstanding—basic		40,356			42,292			40,432			42,490
Weighted average dilutive share equivalents from stock options		—			355			—			392
Weighted average dilutive common shares subject to repurchase		—			115			—			107
Weighted average shares outstanding—diluted		40,356			42,762			40,432			42,989
Earnings (loss) per share:
Basic	$	(0.04	)	$	0.06		$	(0.05	)	$	0.12
Diluted	$	(0.04	)	$	0.06		$	(0.05	)	$	0.12

Schedule of Common Stock Equivalents Excluded from Diluted Earnings per Share Calculation

The following common stock equivalents were excluded from the earnings (loss) per share calculation as their effect would have been anti-dilutive:

	Three Months Ended				Six Months Ended
	December 30, 2012		January 1, 2012		December 30, 2012		January 1, 2012
	(In thousands)				(In thousands)
Stock options		7,855		5,531		7,569		4,785
Common shares subject to repurchase		364		—		340		—
Total shares of common stock excluded from diluted net income (loss) per share calculation		8,219		5,531		7,909		4,785

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Business Combination - Purchase Price of Fixed Assets And Intangible Assets Based on Their Estimated Fair Values (Detail) (USD $) In Thousands, unless otherwise specified	Apr. 01, 2012
Loans At Acquisition Date [Line Items]
Fixed assets	$ 50
Intangible assets	1,890
Total	$ 1,940

XML

Stockholder's Equity - Additional Information (Detail) (USD $)	3 Months Ended						6 Months Ended
	Dec. 30, 2012	Sep. 30, 2012	Jan. 01, 2012	Dec. 30, 2012 Stock Repurchase Program [Member]	Dec. 30, 2012 Stock Options [Member]	Jan. 01, 2012 Stock Options [Member]	Dec. 30, 2012 Stock Options [Member]	Jan. 01, 2012 Stock Options [Member]	Dec. 28, 2012 Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock closing price									$ 5.66
Total intrinsic value of options exercised during the period, approximately	141,000		54,000
Weighted-average grant date fair value					$ 2.92	$ 2.43	$ 2.92	$ 2.43
Employee service share based compensation nonvested awards estimated forfeiture rate					5.60%	7.20%
Future compensation cost related to unvested stock-based awards	6,600,000
Employee service share based compensation nonvested awards estimated forfeitures amount							1,100,000
Compensation cost, amortization period, years							1 year 4 months 24 days
Expense relating to ESPP					200,000	200,000	300,000	300,000
Granted shares of performed based restricted stock	103,000	92,620	110,000
Repurchased common stock, shares				257,927
Aggregate price of common stock repurchased				1,600,000
Shares repurchased				77,234
Shares repurchase aggregate price				$ 500,000
Total remaining shares available for repurchase, approximately				1,900,000

XML

Business Combination (Tables)

6 Months Ended

Dec. 30, 2012

Purchase Price of Contingent Consideration

The purchase price was determined as follows (amounts in thousands):

Initial cash payment	$	1,400
Fair value of contingent consideration		540
Total	$	1,940

Purchase Price of Fixed Assets and Intangible Assets Based on Their Estimated Fair Values

This purchase price was allocated to fixed assets and intangible assets based on their estimated fair values as follows (amounts in thousands):

Fixed assets	$	50
Intangible assets		1,890
Total	$	1,940

Estimated Fair Value of Intangible Assets Acquired under the Transaction

The estimated fair value of intangible assets acquired under the transaction consists of the following (in thousands):

Existing technology (estimated useful life 4 years)	$	1,612
Customer relationships (estimated useful life 2 years)		278
Total	$	1,890

XML

Financial Instruments - Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Jul. 01, 2012
Assets:
Total short-term investments	$ 44,789	$ 39,280
Total financial assets	54,865	47,930
Liabilities:
Contingent consideration	650	540
Total financial liabilities	650	540
Money market funds [Member]
Assets:
Corporate debt securities	10,076	8,650
Corporate debt securities [Member]
Assets:
Corporate debt securities	33,646	23,703
Government sponsored enterprise debt securities [Member]
Assets:
Corporate debt securities	8,259	12,515
Mutual funds [Member]
Assets:
Corporate debt securities	2,884	3,062
Quoted prices in Active Markets for Identical Assets (Level 1) [Member]
Assets:
Total short-term investments	2,884	3,062
Total financial assets	12,960	11,712
Quoted prices in Active Markets for Identical Assets (Level 1) [Member] | Money market funds [Member]
Assets:
Corporate debt securities	10,076	8,650
Quoted prices in Active Markets for Identical Assets (Level 1) [Member] | Mutual funds [Member]
Assets:
Corporate debt securities	2,884	3,062
Significant Other Observable Inputs (Level 2) [Member]
Assets:
Total short-term investments	41,905	36,218
Total financial assets	41,905	36,218
Significant Other Observable Inputs (Level 2) [Member] | Corporate debt securities [Member]
Assets:
Corporate debt securities	33,646	23,703
Significant Other Observable Inputs (Level 2) [Member] | Government sponsored enterprise debt securities [Member]
Assets:
Corporate debt securities	8,259	12,515
Significant Other Unobservable Inputs (Level 3) [Member]
Liabilities:
Contingent consideration	650	540
Total financial liabilities	$ 650	$ 540

XML

Financial Instruments

6 Months Ended

Dec. 30, 2012

Financial Instruments

Note 2. Financial Instruments

We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value is observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

• Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

• Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

• Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Financial assets measured at fair value on a recurring basis consisted of the following types of instruments as of December 30, 2012 and July 1, 2012:

	Fair Value as of December 30, 2012		Quoted prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Money market funds	$	10,076	$	10,076	$	—	$	—
Short-term investments:
Corporate debt securities		33,646		—		33,646		—
Government sponsored enterprise debt securities		8,259		—		8,259		—
Mutual funds		2,884		2,884		—		—
Total short-term investments		44,789		2,884		41,905		—
Total financial assets	$	54,865	$	12,960	$	41,905	$	—
Liabilities:
Contingent consideration	$	650	$	—	$	—	$	650
Total financial liabilities	$	650	$	—	$	—	$	650

	Fair Value as of July 1, 2012		Quoted prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Money market funds	$	8,650	$	8,650	$	—	$	—
Short-term investments:
Corporate debt securities		23,703		—		23,703		—
Government sponsored enterprise debt securities		12,515		—		12,515		—
Mutual funds		3,062		3,062		—		—
Total short-term investments		39,280		3,062		36,218		—
Total financial assets	$	47,930	$	11,712	$	36,218	$	—
Liabilities:
Contingent consideration	$	540	$	—	$	—	$	540
Total financial liabilities	$	540	$	—	$	—	$	540

Level 1 and 2 financial assets:

The fair values of our money market funds and mutual funds were derived from quoted market prices as active markets for these instruments exist. The fair values of corporate debt securities and government sponsored enterprise debt securities were derived from non-binding market consensus prices that are corroborated by observable market data.

The investments in mutual funds are held in a Rabbi trust to support the terms of our deferred compensation plan.

The following table summarizes available-for-sale and trading securities recorded as cash and cash equivalents or short-term investments:

	Amortized Cost		Gross  Unrealized  Gains (Losses)		Fair Value
December 30, 2012	(In thousands)
Money market funds	$	10,076	$	—	$	10,076
Corporate debt securities		33,642		4		33,646
Government sponsored enterprise debt securities		8,258		1		8,259
Mutual funds		2,884		—		2,884
Total financial assets	$	54,860	$	5	$	54,865

	Amortized Cost		Gross  Unrealized  Gains (Losses)			Fair Value
July 1, 2012	(In thousands)
Money market funds	$	8,650	$	—		$	8,650
Corporate debt securities		23,705		(2	)		23,703
Government sponsored enterprise debt securities		12,513		2			12,515
Mutual funds		3,062		—			3,062
Total financial assets	$	47,930	$	—		$	47,930

The following table summarizes the contractual maturities of fixed income securities (corporate debt securities and government sponsored enterprise debt securities) recorded as short-term investments as of December 30, 2012:

	Amortized Cost		Fair Value
	(In thousands)
Less than 1 year	$	22,373	$	22,385
Due in 1 to 3 years		19,527		19,520
Total	$	41,900	$	41,905

Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations.

Level 3 financial liability:

The following table reconciles the beginning and ending balances for Level 3 liabilities for the first six months of 2013 (in thousands):

	Contingent consideration
Balance as of July 1, 2012	$	540
Add: Adjustment to present value of contingent consideration		110
Balance as of December 30, 2012	$	650

Contingent consideration on acquired business is measured at fair value on a recurring basis using Level 3 inputs as defined in the fair value hierarchy. The following table presents certain information about the significant unobservable inputs used in the fair value measurement for the contingent consideration measured at fair value on a recurring basis using significant unobservable inputs:

Description	Valuation Techniques	Significant Unobservable Inputs
Liabilities: Contingent consideration	Present value of a Probability Weighted Earnout model using an appropriate discount rate.	Estimate of future revenue associated with acquired technology. Revenue of $4.9 million over a range of 2.5 years to 3 years.

An increase in the revenue growth percentage could result in a significantly higher estimated fair value of the contingent consideration liability. Alternatively, a decrease in the revenue growth percentage could result in a significantly lower estimated fair value of contingent consideration liability.

The fair value of contingent consideration was derived from a probability weighted earn-out model of future contingent payments. The cash payments, if any, are expected to be made quarterly, based upon revenue generated from the acquired product line, starting in fiscal 2013. No payments were made in the first six months of fiscal 2013. The valuation of this liability is estimated based upon a collaborative effort of the Company’s marketing and finance departments. These future contingent payments are calculated based on estimates of future revenue attributable to the acquired technology (Note 12). To obtain a current valuation of these projected cash flows, an expected present value technique is applied using an appropriate discount rate. The cash flow projections and discount rates will be reviewed quarterly and updated as and when necessary. Potential valuation adjustments will be made as future revenue projections are updated which affect the calculation of the related contingent consideration payments. These adjustments will be recorded in the income statement.

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Financial Instruments - Available-For-Sale and Trading Securities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Jul. 01, 2012
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	$ 54,860	$ 47,930
Available-for-sale securities, Gross Unrealized Gains (Losses)	5
Available-for-sale securities, Fair Value	54,865	47,930
Money market funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	10,076	8,650
Available-for-sale securities, Fair Value	10,076	8,650
Corporate debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	33,642	23,705
Available-for-sale securities, Gross Unrealized Gains (Losses)	4	(2)
Available-for-sale securities, Fair Value	33,646	23,703
Government sponsored enterprise debt securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	8,258	12,513
Available-for-sale securities, Gross Unrealized Gains (Losses)	1	2
Available-for-sale securities, Fair Value	8,259	12,515
Mutual funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale securities, Amortized Cost	2,884	3,062
Available-for-sale securities, Fair Value	$ 2,884	$ 3,062

XML

Warranty - Changes in Accrued Warranty Liability (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Schedule Of Product Warranty Liability [Line Items]
Beginning balance	$ 1,779	$ 1,477	$ 1,722	$ 1,601
Provision for warranty	511	725	1,242	1,230
Accruals related to change in estimate	(214)	251	(97)	343
Less: Actual warranty costs	(584)	(618)	(1,375)	(1,339)
Ending balance	$ 1,492	$ 1,835	$ 1,492	$ 1,835

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Business Segment Information - Additional Information (Detail)	6 Months Ended
	Dec. 30, 2012 Segment
Segment Reporting Information [Line Items]
Reporting segments	2

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Jul. 01, 2012
Current assets:
Cash and cash equivalents	$ 25,966	$ 27,659
Short-term investments	44,789	39,280
Accounts receivable, net of allowance for doubtful accounts of $658 and $108	35,789	45,952
Inventories	48,176	47,618
Prepaids and other current assets	19,290	16,943
Total current assets	174,010	177,452
Property, plant and equipment, net	23,075	22,702
Intangible assets, net	3,364	3,458
Deferred taxes and other assets	28,200	27,413
Total assets	228,649	231,025
Current liabilities:
Accounts payable	12,715	9,300
Accrued compensation	12,606	14,574
Accrued warranty	1,492	1,722
Other accrued liabilities	10,409	11,841
Total current liabilities	37,222	37,437
Long-term obligations	5,239	5,472
Deferred income taxes	334	334
Total liabilities	42,795	43,243
Commitments and contingencies (Note 10)
Stockholders' equity:
Preferred stock, $0.0001 par value; 500 shares authorized, none issued
Common stock, $0.0001 par value; 70,000 shares authorized, 52,177 shares issued and 40,685 outstanding at December 30, 2012; 51,500 shares issued and 40,952 outstanding at July 1, 2012	193,408	193,478
Accumulated other comprehensive loss	(112)	(232)
Accumulated deficit	(7,442)	(5,464)
Total stockholders' equity	185,854	187,782
Total liabilities and stockholders' equity	$ 228,649	$ 231,025

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Stockholders' Equity - Fair Value of Stock-Based Awards to Employees (Detail)	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life (in years)	4 years 10 months 24 days	4 years 10 months 24 days	4 years 10 months 24 days	5 years
Risk-free interest rate	0.50%	0.60%	0.50%	0.70%
Volatility	56.80%	56.80%	56.80%	56.20%

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012
Cash flows from operating activities:
Net income (loss)	$ (1,978)	$ 5,194
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	3,206	2,854
Deferred income taxes	(1,418)	2,048
Loss on disposal of fixed assets	330	139
Stock-based compensation	3,459	2,843
Allowance for doubtful accounts	550	10
Provision for excess and obsolete inventory	1,446	2,012
Changes in assets and liabilities:
Accounts receivable	9,613	3,962
Inventories	(2,004)	(1,859)
Prepaids and other assets	(1,227)	(3,260)
Accounts payable	2,361	(7,601)
Accrued compensation	(1,968)	(811)
Other accrued liabilities	(2,247)	(3,229)
Net cash provided by operating activities	10,123	2,302
Cash flows from investing activities:
Purchases of short-term investments	(22,546)	(15,576)
Maturities/sale of short-term investments	16,500	22,728
Purchases of property, plant and equipment	(2,259)	(1,922)
Payment to acquire business	(100)
Remaining cash proceeds from sale of discontinued operations		210
Net cash provided by (used in) investing activities	(8,405)	5,440
Cash flows from financing activities:
Proceeds from issuance of common stock	2,111	1,072
Repurchase of common stock	(5,640)	(6,102)
Net cash used in financing activities	(3,529)	(5,030)
Effect of exchange rate changes on cash	118	(236)
Net increase (decrease) in cash and cash equivalents	(1,693)	2,476
Cash and cash equivalents at beginning of period	27,659	20,318
Cash and cash equivalents at end of period	25,966	22,794
Non-cash investing and financing activities:
Unrealized gain (loss) on investments, net	2	(31)
Property, plant and equipment purchases included in accounts payable	1,239	133
Purchase consideration for acquired business	350
Cash payments for:
Income taxes	$ 1,417	$ 264

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Financial Instruments - Schedule of Contingent Consideration Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Detail) (Contingent consideration [Member], USD $) In Millions, unless otherwise specified	6 Months Ended
	Dec. 30, 2012
Contingent consideration [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Valuation Techniques	Present value of a Probability Weighted Earnout model using an appropriate discount rate.
Estimate future revenue associated with acquired technology	$ 4.9
Estimate future revenue associated with acquired technology minimum	2 years 6 months
Estimate future revenue associated with acquired technology maximum	3 years

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Inventories (Tables)

6 Months Ended

Dec. 30, 2012

Schedule of Inventories

Components of inventories were as follows:

	December 30, 2012		July 1, 2012
	(In thousands)
Raw materials	$	19,950	$	21,003
Work-in-process		9,794		10,440
Finished goods		18,432		16,175
Inventories	$	48,176	$	47,618

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Inventories - Schedule of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Jul. 01, 2012
Schedule Of Inventory Current [Line Items]
Raw materials	$ 19,950	$ 21,003
Work-in-process	9,794	10,440
Finished goods	18,432	16,175
Inventories	$ 48,176	$ 47,618

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Warranty (Tables)

6 Months Ended

Dec. 30, 2012

Changes in Accrued Warranty Liability

Changes in our accrued warranty liability were as follows:

	Three Months Ended						Six Months Ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
	(In thousands)						(In thousands)
Beginning balance	$	1,779		$	1,477		$	1,722		$	1,601
Provision for warranty		511			725			1,242			1,230
Accruals related to change in estimate		(214	)		251			(97	)		343
Less: Actual warranty costs		(584	)		(618	)		(1,375	)		(1,339	)
Ending balance	$	1,492		$	1,835		$	1,492		$	1,835

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Basis of Presentation and Recently Issued Accounting Pronouncements

6 Months Ended

Dec. 30, 2012

Basis of Presentation and Recently Issued Accounting Pronouncements

Note 1. Basis of Presentation and Recently Issued Accounting Pronouncements

The condensed consolidated financial statements of Symmetricom, Inc. (“Symmetricom,” “we,” “us,” the “Company,” or “our”) included herein are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of the management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. In presenting the financial statements in accordance with accounting principles generally accepted in the United States (US GAAP), management makes certain estimates and assumptions that impact the amounts reported and related disclosures. Estimates, by their nature, are judgments based upon available information. Accordingly, actual results could differ from those estimates.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Symmetricom’s Annual Report on Form 10-K for the fiscal year ended July 1, 2012. The results of operations for the three and six months ended December 30, 2012 are not necessarily indicative of the results to be anticipated for the entire fiscal year ending June 30, 2013.

The condensed consolidated balance sheet as of July 1, 2012 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes required by US GAAP for complete financial statements.

Fiscal Quarter

Our fiscal quarter is 13 weeks ending on the Sunday closest to the end of the calendar quarter.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Dec. 30, 2012	Jul. 01, 2012
Allowance for doubtful accounts	$ 658	$ 108
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	500	500
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	70,000	70,000
Common stock, shares issued	52,177	51,500
Common stock, shares outstanding	40,685	40,952

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Business Segment Information

6 Months Ended

Dec. 30, 2012

Business Segment Information

Note 11. Business Segment Information

Symmetricom is organized into two operating segments: Communications and Government and Enterprise. These two operating segments are our reporting segments. The Chief Operating Decision Maker (CODM), as defined by authoritative accounting guidance on Segment Reporting, is our President and Chief Executive Officer (CEO). Our CEO allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss) before interest and taxes.

With the exception of intangible assets, we do not identify or allocate assets by operating segment, nor does our CEO evaluate operating segments using discrete asset information. We do not allocate restructuring charges, interest and other income, interest expense, or income taxes to operating segments.

The following describes our two reporting segments:

Communications

Our Communications business supplies timing technologies and services for worldwide communications infrastructure. Products include primary reference sources, synchronization distribution systems and embedded components and software, all of which support the timing and synchronization requirements of telecommunications and cable networks and equipment.

Government and Enterprise

Our Government and Enterprise business provides time technology products for aerospace/defense, IT infrastructure and science and metrology applications. Precision time and frequency systems enable a range of critical operations, including the international time scale, global navigation, the management of power grids, synchronization of complex control systems, and signals intelligence for securing communications in remote and hostile environments.

Segment revenue, gross profit and operating income (loss) were as follows during the periods presented:

Three months ended December 30, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	26,188	$	22,963	$	—		$	49,151
Cost of sales		13,425		14,674		51			28,150
Gross profit		12,763		8,289		(51	)		21,001
Operating expenses		9,098		6,669		8,048			23,815
Operating income (loss)	$	3,665	$	1,620	$	(8,099	)	$	(2,814	)

Three months ended January 1, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	33,307	$	24,987	$	—		$	58,294
Cost of sales		16,856		15,554		674			33,084
Gross profit		16,451		9,433		(674	)		25,210
Operating expenses		9,518		6,746		5,303			21,567
Operating income (loss)	$	6,933	$	2,687	$	(5,977	)	$	3,643

Six months ended December 30, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	57,627	$	47,915	$	—		$	105,542
Cost of sales		28,635		31,598		6			60,239
Gross profit		28,992		16,317		(6	)		45,303
Operating expenses		18,789		13,857		15,850			48,496
Operating income (loss)	$	10,203	$	2,460	$	(15,856	)	$	(3,193	)

Six months ended January 1, 2012

	Communications		Government and Enterprise		Corporate			Total
	(In thousands)
Net revenue	$	66,877	$	47,795	$	—		$	114,672
Cost of sales		33,135		29,291		1,091			63,517
Gross profit		33,742		18,504		(1,091	)		51,155
Operating expenses		19,248		13,015		11,160			43,423
Operating income (loss)	$	14,494	$	5,489	$	(12,251	)	$	7,732

The information in the Corporate category above represents corporate-related costs that are not allocated to either of our two segments for the purpose of evaluating their performance. The following table outlines our major corporate-related costs:

	Three Months Ended				Six Months Ended
	December 30, 2012		January 1, 2012		December 30, 2012		January 1, 2012
	(In thousands)				(In thousands)
Selling, general and administrative costs	$	6,912	$	5,200	$	14,659	$	10,961
Restructuring charges		1,187		777		1,197		1,290
Corporate-related total	$	8,099	$	5,977	$	15,856	$	12,251

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Document and Entity Information	6 Months Ended
	Dec. 30, 2012	Jan. 27, 2013
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 30, 2012
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Trading Symbol	SYMM
Entity Registrant Name	SYMMETRICOM INC
Entity Central Index Key	0000082628
Current Fiscal Year End Date	--06-30
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		40,796,571

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Business Combination

6 Months Ended

Dec. 30, 2012

Business Combination

12. Business Combination

During the third quarter of fiscal 2012, the Company acquired a product line (existing technology, customer relationships, fixed assets and employees) to enhance the Company’s product offerings in embedded timing and synchronization solutions for residential small cell solutions. This transaction was recorded as an acquisition of a business. The transaction price was approximately $2.4 million of which $1.4 million was paid in cash and approximately $1.0 million is contingent consideration payable as a royalty upon future sales of such products.

The fair value of the contingent consideration arrangement at the acquisition date was $0.5 million. We estimated the fair value of the contingent consideration using a probability-weighted discounted cash flow model (See Note 2). The purchase price was determined as follows (amounts in thousands):

Initial cash payment	$	1,400
Fair value of contingent consideration		540
Total	$	1,940

This purchase price was allocated to fixed assets and intangible assets based on their estimated fair values as follows (amounts in thousands):

Fixed assets	$	50
Intangible assets		1,890
Total	$	1,940

The estimated fair value of intangible assets acquired under the transaction consists of the following (in thousands):

Existing technology (estimated useful life 4 years)	$	1,612
Customer relationships (estimated useful life 2 years)		278
Total	$	1,890

The fair value of the acquired non-monetary assets, summarized above, were derived from significant unobservable inputs (“Level 3 inputs”) determined by the Company based on market analysis, income analysis (discounted cash flow model), or cost approach. The fair value of fixed assets acquired was determined using market data for similar assets. The fair value of existing technology was determined using a discounted cash flow model from cash flow projections prepared by management, including estimated undiscounted cash flows of approximately $3 million during the five to six year period after the acquisition, and a weighted average cost of capital. The fair value of customer relationships was determined using a cost approach which includes an estimate of time and expenses required to recreate the intangible asset.

During the second quarter of fiscal 2013, the Company acquired a product line (existing technology, inventories, and support from the former owner) to enhance the Company’s product offerings of test and measurement solutions. This transaction has been recorded as an acquisition of a business. The transaction price was approximately $0.5 million payable in cash in periodic installments to the former owner. The purchase price was entirely allocated to existing technology (the acquired intangible asset) which has an estimated useful life of 5 years.

Pro forma results of operations have not been presented because the effect of the business combinations described in this Note was not material to our condensed consolidated results of operations. Revenue and earnings per share for the acquired businesses from the date of acquisition through December 30, 2012, were not material.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Net revenue	$ 49,151	$ 58,294	$ 105,542	$ 114,672
Cost of sales:
Cost of products and services	27,861	32,225	59,761	62,055
Acquisition-related costs	248	185	482	371
Restructuring charges	41	674	(4)	1,091
Total cost of sales	28,150	33,084	60,239	63,517
Gross profit	21,001	25,210	45,303	51,155
Operating expenses:
Research and development	7,805	6,548	16,118	13,446
Selling, general and administrative	14,778	14,864	31,005	29,674
Amortization of intangible assets	86	52	172	104
Restructuring charges	1,146	103	1,201	199
Total operating expenses	23,815	21,567	48,496	43,423
Operating income (loss)	(2,814)	3,643	(3,193)	7,732
Interest income, net of amortization (accretion) of premium (discount) on investments	178	(296)	142	(230)
Income (loss) before taxes	(2,636)	3,347	(3,051)	7,502
Income tax provision (benefit)	(861)	902	(1,073)	2,308
Net income (loss)	$ (1,775)	$ 2,445	$ (1,978)	$ 5,194
Earnings (loss) per share:
Basic	$ (0.04)	$ 0.06	$ (0.05)	$ 0.12
Diluted	$ (0.04)	$ 0.06	$ (0.05)	$ 0.12
Shares used in computing earnings (loss) per share:
Weighted average shares outstanding-basic	40,356	42,292	40,432	42,490
Weighted average shares outstanding-diluted	40,356	42,762	40,432	42,989

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Long-term Obligations

6 Months Ended

Dec. 30, 2012

Long-term Obligations

Note 6. Long-term Obligations

Long-term obligations consist of:

	December 30, 2012		July 1, 2012
	(In thousands)
Long-term obligations:
Deferred revenue	$	2,029	$	2,254
Lease loss accrual, net		963		1,240
Rent accrual		1,043		1,102
Post-retirement benefits		193		173
Income tax		216		216
Consideration for acquired businesses		795		487
Total	$	5,239	$	5,472

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Warranty

6 Months Ended

Dec. 30, 2012

Warranty

Note 5. Warranty

Changes in our accrued warranty liability were as follows:

	Three Months Ended						Six Months Ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
	(In thousands)						(In thousands)
Beginning balance	$	1,779		$	1,477		$	1,722		$	1,601
Provision for warranty		511			725			1,242			1,230
Accruals related to change in estimate		(214	)		251			(97	)		343
Less: Actual warranty costs		(584	)		(618	)		(1,375	)		(1,339	)
Ending balance	$	1,492		$	1,835		$	1,492		$	1,835

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Intangible Assets (Tables)

6 Months Ended

Dec. 30, 2012

Other Intangible Assets

Intangible assets consist of:

	Gross Carrying Amount		Accumulated Amortization			Net Intangible Assets
	(in thousands)
Purchased technology	$	26,420	$	(24,215	)	$	2,205
Customer lists and trademarks		7,303		(6,144	)		1,159
Total as of December 30, 2012	$	33,723	$	(30,359	)	$	3,364
Purchased technology	$	25,970	$	(23,845	)	$	2,125
Customer lists and trademarks		7,303		(5,970	)		1,333
Total as of July 1, 2012	$	33,273	$	(29,815	)	$	3,458

Estimated Future Amortization Expense

The estimated future amortization expense by fiscal year is as follows:

Fiscal year:	(in thousands)
2013 (Remaining 6 months)	$	567
2014		1,099
2015		726
2016		551
2017		244
Thereafter		177
Total amortization	$	3,364

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Subsequent Event

6 Months Ended

Dec. 30, 2012

Subsequent Event

13. Subsequent Event

On January 21, 2013, the Company’s Board of Directors approved a restructuring action to reduce operating costs while retaining focus on its strategic initiatives. The Company plans to reduce the size of its workforce by approximately 20 positions. The reductions will begin in January and are expected to be complete by August 2013. In conjunction with the headcount reduction, the Company will further reduce the size of its facility presence in Santa Rosa, CA. The Company expects to incur restructuring charges in the range of $1.5 million to $1.8 million in connection with the plan. This includes $1.0 million to $1.3 million in expected charges for one-time termination benefits and $0.5 million associated with the Company’s reduction of occupied commercial space in Santa Rosa, CA. Upon completion, Symmetricom expects these restructuring actions to reduce annual costs by approximately $4.0 million.

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Net Income (Loss) Per Share

6 Months Ended

Dec. 30, 2012

Net Income (Loss) Per Share

Note 9. Net Income (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding and common equivalent shares from dilutive stock options, employee stock purchase plan and restricted stock using the treasury stock method, except when antidilutive.

The following table reconciles the number of shares utilized in the net income (loss) per share calculations:

	Three Months Ended						Six Months Ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
	(In thousands, except per share amounts)
Numerator:
Net income (loss)	$	(1,775	)	$	2,445		$	(1,978	)	$	5,194
Shares (denominator):
Weighted average common shares outstanding		40,720			42,530			40,772			42,715
Weighted average common shares outstanding subject to repurchase		(364	)		(238	)		(340	)		(225	)
Weighted average shares outstanding—basic		40,356			42,292			40,432			42,490
Weighted average dilutive share equivalents from stock options		—			355			—			392
Weighted average dilutive common shares subject to repurchase		—			115			—			107
Weighted average shares outstanding—diluted		40,356			42,762			40,432			42,989
Earnings (loss) per share:
Basic	$	(0.04	)	$	0.06		$	(0.05	)	$	0.12
Diluted	$	(0.04	)	$	0.06		$	(0.05	)	$	0.12

Unvested restricted stock is subject to repurchase by the Company and therefore is not included in the calculation of the weighted-average shares outstanding for basic earnings per share.

The following common stock equivalents were excluded from the earnings (loss) per share calculation as their effect would have been anti-dilutive:

	Three Months Ended				Six Months Ended
	December 30, 2012		January 1, 2012		December 30, 2012		January 1, 2012
	(In thousands)				(In thousands)
Stock options		7,855		5,531		7,569		4,785
Common shares subject to repurchase		364		—		340		—
Total shares of common stock excluded from diluted net income (loss) per share calculation		8,219		5,531		7,909		4,785

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Stockholders' Equity

6 Months Ended

Dec. 30, 2012

Stockholders' Equity

Note 7. Stockholders’ Equity

Stock Options and Awards Activity

Stock award activity for the six months ended December 30, 2012 is as follows:

	Shares Available For Grant			Non Performance-based Options Outstanding					Restricted Stock Outstanding
				Number of Shares			Weighted Average Exercise Price Per Share		Number of Shares			Weighted Average Grant-Date Fair Value
	(In thousands, except per share amounts)
Balances at July 1, 2012		2,889			7,316		$	5.54		261		$	5.68
Granted—options		(1,280	)		1,280			6.14		—			—
Granted—restricted shares		(406	)		—			—		203			6.19
Exercised		—			(316	)		4.88		—			—
Vested		—			—			—		(107	)		5.94
Cancelled		140			(140	)		5.85		—			—
Balances at December 30, 2012		1,343			8,140		$	5.65		357		$	5.89

Stock options outstanding, vested and expected to vest, and exercisable as of December 30, 2012 were as follows:

Options	Number of Shares		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Aggregate Intrinsic Value
	(In thousands)		(In years)				(In thousands)
Outstanding		8,140		4.58	$	5.65	$	3,179
Vested and expected to vest		7,852		4.53	$	5.65	$	3,117
Exercisable		4,208		3.50	$	5.64	$	2,157

The aggregate intrinsic value in the preceding table represents the total pre-tax value of stock options outstanding as of December 30, 2012, based on our common stock closing price of $5.66 on December 28, 2012, which would have been received by the option holders had all option holders exercised their options as of that date.

The total intrinsic value of options exercised during the second quarter of fiscal 2013 and 2012 was approximately $141,000 and $54,000, respectively.

For the second quarter of fiscal 2013 and 2012, the weighted-average estimated fair value of options granted was $2.92 and $2.43 per share, respectively. For the six months ended December 30, 2012 and January 1, 2012, the weighted-average estimated fair value of options granted was $2.92 and $2.43 per share, respectively. Our calculations were made using the Black-Scholes option-pricing model. The fair value of Symmetricom stock-based awards to employees was estimated assuming no expected dividend and the weighted-average assumptions for the three and six months ended December 30, 2012 and January 1, 2012 as follows:

	Three months ended						Six months ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
Expected life (in years)		4.9			4.9			4.9			5.0
Risk-free interest rate		0.5	%		0.6	%		0.5	%		0.7	%
Volatility		56.8	%		56.8	%		56.8	%		56.2	%

We calculated the stock-based compensation expense in the second quarter of fiscal 2013 and 2012, using an estimated annual forfeiture rate of 5.6% and 7.2%, respectively. At December 30, 2012, the total cumulative compensation cost related to unvested stock-based awards granted to employees, directors and consultants under the Company’s stock option plans, but not yet recognized, was approximately $6.6 million, net of estimated forfeitures of $1.1 million. This cost will be amortized on an accelerated method basis over a period of approximately 1.4 years and will be adjusted for subsequent changes in estimated forfeitures.

The following table shows total stock-based compensation costs included in the condensed consolidated statements of operations:

	Three Months Ended				Six Months Ended
	December 30, 2012		January 1, 2012		December 30, 2012		January 1, 2012
	(In thousands)				(In thousands)
Cost of sales	$	250	$	215	$	541	$	334
Research and development		316		295		677		584
Selling, general and administrative		1,121		1,170		2,241		1,925
Pre-tax stock-based compensation expense		1,687		1,680		3,459		2,843
Less: Income Tax effect		624		622		1,280		1,052
Total	$	1,063	$	1,058	$	2,179	$	1,791

The above table includes expense of $0.2 million and $0.3 million, relating to the employee stock purchase plan (ESPP) for the second quarter and first six months of both fiscal 2013 and 2012.

Performance Awards

In the second quarter of fiscal 2012, the Company communicated its intention to grant 110,000 shares of performance based restricted stock to its executive management employees subject to the achievement of certain financial performance targets. The number of stock awards that will ultimately be granted depends on actual business performance measured for fiscal 2012 against certain targets for revenue and profitability for the Company’s business as well as continued employment with the Company. During the first quarter of fiscal 2013, 92,620 restricted shares were granted upon achievement of financial performance targets.

In the second quarter of fiscal 2013, the Company communicated its intention to grant 103,000 shares of performance based restricted stock to its executive management employees subject to the achievement of certain financial performance targets. The number of stock awards that will ultimately be granted depends on actual business performance measured for fiscal 2013 against certain targets for revenue and profitability for the Company’s business as well as continued employment with the Company.

Stock Repurchases

During the second quarter of fiscal 2013, we repurchased 257,927 shares of common stock pursuant to our repurchase program for an aggregate price of approximately $1.6 million. Further, we repurchased 77,234 shares in the second quarter of fiscal 2013 for an aggregate price of approximately $0.5 million to cover the cost of employee income taxes on vested restricted stock and option exercises.

As of December 30, 2012, the total number of shares available for repurchase under the repurchase program authorized by the Board of Directors was approximately 1.9 million.

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Restructuring Charges

6 Months Ended

Dec. 30, 2012

Restructuring Charges

Note 8. Restructuring Charges

The following table shows the details of the restructuring cost accruals, which consist of facilities and severance costs, at December 30, 2012 and July 1, 2012:

	July 1, 2012		Expense Additions			Payments			December 30, 2012
	(in thousands)
Lease loss accrual (fiscal 2004)	$	137	$	2		$	(20	)	$	119
All other restructuring changes (fiscal 2004)		68		30			(47	)		51
Lease loss accrual (fiscal 2009)		902		40			(167	)		775
All other restructuring changes (fiscal 2010)		75		(165	)		164			74
Lease loss accrual (fiscal 2011)		170		2			(25	)		147
Lease loss accrual (fiscal 2012)		698		9			(154	)		553
All other restructuring changes (fiscal 2012)		159		202			(287	)		74
All other restructuring changes (fiscal 2013)		—		1,077			(1,027	)		50
Total	$	2,209	$	1,197		$	(1,563	)	$	1,843

During the first six months of fiscal 2013, we incurred approximately $1.1 million severance, consulting and outside service charges related to closing of research and development operations in China.

The lease loss accruals are subject to periodic revisions based on current market estimates. The lease loss accruals as of December 30, 2012 will be paid over the next five years.

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Litigation and Contingencies

6 Months Ended

Dec. 30, 2012

Litigation and Contingencies

Note 10. Litigation and Contingencies

Litigation—The Company is or was a party to the following material litigations:

Former Texas Facility Environmental Cleanup

We formerly leased a tract of land in Texas for our operations. Those operations involved the use of solvents and, at the end of the lease, we remediated an area where the solvents had been deposited on the ground and obtained regulatory approval for that remedial activity. In 1996, an environmental investigation of the property detected those same contaminants in groundwater in excess of then current regulatory standards. The groundwater contamination has migrated to some adjacent properties. We have entered into the Texas Natural Resource Conservation Commission’s Voluntary Cleanup Program (the “Voluntary Cleanup Program”) to obtain regulatory approval for closure of this site and a release from liability to the State of Texas for subsequent landowners and lenders. We have notified adjacent property owners affected by the contamination of participation in the Voluntary Cleanup Program. On May 20, 2004, we received a demand from the owner of several adjacent lots for damages in the amount of $1.3 million, as well as seeking an indemnity for the contamination and a promise to remediate the contamination. On March 14, 2006, the adjacent property owner filed suit in Probate Court No. 1, Travis County, Texas (Anna B. Miller, Individually and as Executrix of the Estate of Robert L. Miller, et al. vs. Austron, Inc., et al.), seeking damages. Symmetricom has not yet been served in this matter, but we intend to defend this lawsuit vigorously. We are continuing to work on the remediation of the formerly leased site as well as the adjacent properties, and have also taken steps to begin work on the Miller property. As of December 30, 2012, we had an accrual of $50,000 for remediation costs and other ongoing monitoring costs which has been included within “other accrued liabilities” on our condensed consolidated balance sheet.

Michael E. McNeil, et al. vs. Jason Book, et al.

On or around May 25, 2010, Symmetricom was served with the first amended complaint in the case of Michael E. McNeil, et al. vs. Jason Book, et al. (Case No. CV165643) filed in Santa Cruz County Superior Court, California. The first amended complaint added Symmetricom and several other parties to the lawsuit, which had been originally filed in 2009 by plaintiffs against their former attorney for legal malpractice in connection with certain settlement agreements in 1999 between plaintiffs and Datum (a company acquired by Symmetricom) in which they assigned to Datum certain intellectual property rights. The complaint has since been amended for the second time and Symmetricom was served with the second amended complaint on or around January 7, 2011. The second amended complaint alleges several causes of action, including claims against Symmetricom for contract rescission, breach of contract, conversion and unjust enrichment, and seeks unspecified monetary damages along with equitable relief. Management believes that this lawsuit has no merit or basis and intends to defend this lawsuit vigorously and as a result, no accrual has been made in relation to this litigation. Management believes the final outcome of this matter will not have a material adverse effect on our financial position and results of operations.

General

Under the indemnification provisions of our standard sales contracts, we agree to defend the customer against third party claims asserting infringement of certain intellectual property rights, which may include patents, copyrights, trademarks or trade secrets, and to pay any judgments entered on such claims against the reseller/customer. The exposure to us under these indemnification provisions is generally limited to the total amount paid by the customer under the agreement. However, certain agreements include indemnification provisions that could potentially expose us to losses in excess of the amount received under the agreement. To date, there have been no claims under such indemnification provisions. We believe the estimated fair value of these indemnification agreements is not material.

We are also a party to certain other claims in the normal course of our operations. While the results of these claims cannot be predicted with any certainty, we believe that the final outcome of these matters will not have a material adverse effect on our consolidated financial position and results of operations.

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Financial Instruments - Reconciles Beginning and Ending Balances for Level 3 Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 30, 2012
Reconciles the beginning and ending balances for Level 3 liabilities
Beginning balance	$ 540
Add: Adjustment to present value of contingent consideration	110
Ending balance	$ 650

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Litigation and Contingencies - Additional Information (Detail) (USD $)	1 Months Ended
	May 20, 2004	Dec. 30, 2012
Loss Contingencies [Line Items]
Amount sought for damages	$ 1,300,000
Accrued remediation and other ongoing monitoring costs		$ 50,000

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Financial Instruments (Tables)

6 Months Ended

Dec. 30, 2012

Financial Instruments

Financial assets measured at fair value on a recurring basis consisted of the following types of instruments as of December 30, 2012 and July 1, 2012:

	Fair Value as of December 30, 2012		Quoted prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Money market funds	$	10,076	$	10,076	$	—	$	—
Short-term investments:
Corporate debt securities		33,646		—		33,646		—
Government sponsored enterprise debt securities		8,259		—		8,259		—
Mutual funds		2,884		2,884		—		—
Total short-term investments		44,789		2,884		41,905		—
Total financial assets	$	54,865	$	12,960	$	41,905	$	—
Liabilities:
Contingent consideration	$	650	$	—	$	—	$	650
Total financial liabilities	$	650	$	—	$	—	$	650

	Fair Value as of July 1, 2012		Quoted prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(In thousands)
Assets:
Money market funds	$	8,650	$	8,650	$	—	$	—
Short-term investments:
Corporate debt securities		23,703		—		23,703		—
Government sponsored enterprise debt securities		12,515		—		12,515		—
Mutual funds		3,062		3,062		—		—
Total short-term investments		39,280		3,062		36,218		—
Total financial assets	$	47,930	$	11,712	$	36,218	$	—
Liabilities:
Contingent consideration	$	540	$	—	$	—	$	540
Total financial liabilities	$	540	$	—	$	—	$	540

Available-for-Sale and Trading Securities

The following table summarizes available-for-sale and trading securities recorded as cash and cash equivalents or short-term investments:

	Amortized Cost		Gross  Unrealized  Gains (Losses)		Fair Value
December 30, 2012	(In thousands)
Money market funds	$	10,076	$	—	$	10,076
Corporate debt securities		33,642		4		33,646
Government sponsored enterprise debt securities		8,258		1		8,259
Mutual funds		2,884		—		2,884
Total financial assets	$	54,860	$	5	$	54,865

	Amortized Cost		Gross  Unrealized  Gains (Losses)			Fair Value
July 1, 2012	(In thousands)
Money market funds	$	8,650	$	—		$	8,650
Corporate debt securities		23,705		(2	)		23,703
Government sponsored enterprise debt securities		12,513		2			12,515
Mutual funds		3,062		—			3,062
Total financial assets	$	47,930	$	—		$	47,930

Summarizes Available-for-Sale and Trading Securities

The following table summarizes the contractual maturities of fixed income securities (corporate debt securities and government sponsored enterprise debt securities) recorded as short-term investments as of December 30, 2012:

	Amortized Cost		Fair Value
	(In thousands)
Less than 1 year	$	22,373	$	22,385
Due in 1 to 3 years		19,527		19,520
Total	$	41,900	$	41,905

Reconciles Beginning and Ending Balances for Level 3 Liabilities

The following table reconciles the beginning and ending balances for Level 3 liabilities for the first six months of 2013 (in thousands):

	Contingent consideration
Balance as of July 1, 2012	$	540
Add: Adjustment to present value of contingent consideration		110
Balance as of December 30, 2012	$	650

Schedule of Contingent Consideration Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs

The following table presents certain information about the significant unobservable inputs used in the fair value measurement for the contingent consideration measured at fair value on a recurring basis using significant unobservable inputs:

Description	Valuation Techniques	Significant Unobservable Inputs
Liabilities: Contingent consideration	Present value of a Probability Weighted Earnout model using an appropriate discount rate.	Estimate of future revenue associated with acquired technology. Revenue of $4.9 million over a range of 2.5 years to 3 years.

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Stockholders' Equity (Tables)

6 Months Ended

Dec. 30, 2012

Stock Award Activity

Stock award activity for the six months ended December 30, 2012 is as follows:

	Shares Available For Grant			Non Performance-based Options Outstanding					Restricted Stock Outstanding
				Number of Shares			Weighted Average Exercise Price Per Share		Number of Shares			Weighted Average Grant-Date Fair Value
	(In thousands, except per share amounts)
Balances at July 1, 2012		2,889			7,316		$	5.54		261		$	5.68
Granted—options		(1,280	)		1,280			6.14		—			—
Granted—restricted shares		(406	)		—			—		203			6.19
Exercised		—			(316	)		4.88		—			—
Vested		—			—			—		(107	)		5.94
Cancelled		140			(140	)		5.85		—			—
Balances at December 30, 2012		1,343			8,140		$	5.65		357		$	5.89

Stock Options Outstanding, Vested and Expected to Vest, and Exercisable

Stock options outstanding, vested and expected to vest, and exercisable as of December 30, 2012 were as follows:

Options	Number of Shares		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Aggregate Intrinsic Value
	(In thousands)		(In years)				(In thousands)
Outstanding		8,140		4.58	$	5.65	$	3,179
Vested and expected to vest		7,852		4.53	$	5.65	$	3,117
Exercisable		4,208		3.50	$	5.64	$	2,157

Fair Value of Stock-Based Awards to Employees

The fair value of Symmetricom stock-based awards to employees was estimated assuming no expected dividend and the weighted-average assumptions for the three and six months ended December 30, 2012 and January 1, 2012 as follows:

	Three months ended						Six months ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
Expected life (in years)		4.9			4.9			4.9			5.0
Risk-free interest rate		0.5	%		0.6	%		0.5	%		0.7	%
Volatility		56.8	%		56.8	%		56.8	%		56.2	%

Stock-Based Compensation Costs Included in Condensed Consolidated Statements of Operations

The following table shows total stock-based compensation costs included in the condensed consolidated statements of operations:

	Three Months Ended				Six Months Ended
	December 30, 2012		January 1, 2012		December 30, 2012		January 1, 2012
	(In thousands)				(In thousands)
Cost of sales	$	250	$	215	$	541	$	334
Research and development		316		295		677		584
Selling, general and administrative		1,121		1,170		2,241		1,925
Pre-tax stock-based compensation expense		1,687		1,680		3,459		2,843
Less: Income Tax effect		624		622		1,280		1,052
Total	$	1,063	$	1,058	$	2,179	$	1,791

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Net Income (Loss) Per Share - Schedule of Denominator Used in Calculation of Basic and Diluted Net Earnings per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Numerator:
Net income (loss)	$ (1,775)	$ 2,445	$ (1,978)	$ 5,194
Shares (denominator):
Weighted average common shares outstanding	40,720	42,530	40,772	42,715
Weighted average common shares outstanding subject to repurchase	(364)	(238)	(340)	(225)
Weighted average shares outstanding-basic	40,356	42,292	40,432	42,490
Weighted average dilutive share equivalents from stock options		355		392
Weighted average dilutive common shares subject to repurchase		115		107
Weighted average shares outstanding-diluted	40,356	42,762	40,432	42,989
Earnings (loss) per share:
Basic	$ (0.04)	$ 0.06	$ (0.05)	$ 0.12
Diluted	$ (0.04)	$ 0.06	$ (0.05)	$ 0.12

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Long-term Obligations - Long-Term Obligations (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Jul. 01, 2012
Long-term obligations:
Deferred revenue	$ 2,029	$ 2,254
Lease loss accrual, net	963	1,240
Rent accrual	1,043	1,102
Post-retirement benefits	193	173
Income tax	216	216
Consideration for acquired businesses	795	487
Total	$ 5,239	$ 5,472

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012
Net income (loss)	$ (1,775)	$ 2,445	$ (1,978)	$ 5,194
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments	19	11	118	(236)
Unrealized gain (loss) on investments	(18)	4	2	(31)
Other comprehensive income (loss)	1	15	120	(267)
Total comprehensive income (loss)	$ (1,774)	$ 2,460	$ (1,858)	$ 4,927

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Intangible Assets

6 Months Ended

Dec. 30, 2012

Intangible Assets

Note 4. Intangible Assets

Intangible assets consist of:

	Gross Carrying Amount		Accumulated Amortization			Net Intangible Assets
	(in thousands)
Purchased technology	$	26,420	$	(24,215	)	$	2,205
Customer lists and trademarks		7,303		(6,144	)		1,159
Total as of December 30, 2012	$	33,723	$	(30,359	)	$	3,364
Purchased technology	$	25,970	$	(23,845	)	$	2,125
Customer lists and trademarks		7,303		(5,970	)		1,333
Total as of July 1, 2012	$	33,273	$	(29,815	)	$	3,458

The estimated future amortization expense by fiscal year is as follows:

Fiscal year:	(in thousands)
2013 (Remaining 6 months)	$	567
2014		1,099
2015		726
2016		551
2017		244
Thereafter		177
Total amortization	$	3,364

Intangible asset amortization expense for the second quarter of fiscal 2013 and 2012 was $0.3 million and $0.2 million, respectively. Intangible asset amortization expense for the first six months of fiscal 2013 and 2012 was $0.6 million and $0.5 million, respectively.

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Subsequent Event - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		1 Months Ended
	Dec. 30, 2012	Jan. 01, 2012	Dec. 30, 2012	Jan. 01, 2012	Jan. 21, 2013 Subsequent Event [Member] Positions	Jan. 21, 2013 Subsequent Event [Member] Minimum [Member]	Jan. 21, 2013 Subsequent Event [Member] Maximum [Member]	Jan. 21, 2013 Subsequent Event [Member] One-time termination benefits [Member] Minimum [Member]	Jan. 21, 2013 Subsequent Event [Member] One-time termination benefits [Member] Maximum [Member]	Jan. 21, 2013 Subsequent Event [Member] Reduction of occupied commercial space [Member]
Subsequent Event [Line Items]
Date of approval of restructuring action to reduce operating costs					Jan. 21, 2013
Plans to reduce the size of workforce by positions					20
Restructuring charges	$ 1,146,000	$ 103,000	$ 1,201,000	$ 199,000		$ 1,500,000	$ 1,800,000	$ 1,000,000	$ 1,300,000	$ 500,000
Future cost savings										$ 4,000,000

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Restructuring Charges (Tables)

6 Months Ended

Dec. 30, 2012

Schedule of Restructuring and Related Charges

The following table shows the details of the restructuring cost accruals, which consist of facilities and severance costs, at December 30, 2012 and July 1, 2012:

	July 1, 2012		Expense Additions			Payments			December 30, 2012
	(in thousands)
Lease loss accrual (fiscal 2004)	$	137	$	2		$	(20	)	$	119
All other restructuring changes (fiscal 2004)		68		30			(47	)		51
Lease loss accrual (fiscal 2009)		902		40			(167	)		775
All other restructuring changes (fiscal 2010)		75		(165	)		164			74
Lease loss accrual (fiscal 2011)		170		2			(25	)		147
Lease loss accrual (fiscal 2012)		698		9			(154	)		553
All other restructuring changes (fiscal 2012)		159		202			(287	)		74
All other restructuring changes (fiscal 2013)		—		1,077			(1,027	)		50
Total	$	2,209	$	1,197		$	(1,563	)	$	1,843

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Intangible Assets - Estimated Future Amortization Expense (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 30, 2012	Jul. 01, 2012
Finite-Lived Intangible Assets [Line Items]
2013 (Remaining 6 months)	$ 567
2014	1,099
2015	726
2016	551
2017	244
Thereafter	177
Net Intangible Assets	$ 3,364	$ 3,458

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Basis of Presentation and Recently Issued Accounting Pronouncements (Policies)

6 Months Ended

Dec. 30, 2012

Fiscal Quarter

Fiscal Quarter

Our fiscal quarter is 13 weeks ending on the Sunday closest to the end of the calendar quarter.

Fair Value Measurement

We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value is observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

• Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

• Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

• Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.